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**Hain Sells the Chips, Buys the Benefits**

3h ago · 9 sources · earnings

Hain Celestial just made its bet clear. The company is entering a new phase of its turnaround, centered on innovation-led growth grounded in functional foods, after divesting its snacks business in February. Out went Garden Veggie Snacks, Terra chips and Garden of Eatin’. In came a sharper focus.

The timing is bold. Third-quarter revenue fell 13% year over year to $338 million. Organic net sales were down 6%. Adjusted gross margin dropped 90 basis points to 21%. Not exactly victory-lap numbers.

But there are green shoots. SKUs launched or relaunched in the last three years accounted for 12% of net sales in the quarter, up 2.5 percentage points year over year. Three months after offloading snacks, free cash flow increased to $35 million and debt fell below $145 million year-to-date.

Hain plans to back new launches with substantial marketing and increased distribution over the next three years to make the gains stick.

Why it matters: this is a portfolio gut check. Hain is trading nostalgic snack brands for functional positioning across categories like wellness teas, yogurt, baby and children’s food and non-dairy beverages. The near-term pain is obvious. The balance sheet is getting cleaner. Innovation is starting to show up in the mix.

Quick take: 12% of sales from recent launches is not a side project. If Hain can scale that while margins stabilize, the company stops being a turnaround story and starts being a focused functional platform. The next three years will decide which narrative wins.

Key facts

  • Hain Celestial is entering a new phase of its turnaround focused on innovation-led growth grounded in functional benefits after divesting most recently its snack segment in February.
  • The divested snacks business included brands such as Garden Veggie Snacks, Terra chips and Garden of Eatin’ snacks.
  • SKUs launched or relaunched in the last three years accounted for 12% of Hain Celestial’s net sales in the third quarter, up 2.5 percentage points year over year.
  • Hain Celestial reported third-quarter revenue fell 13% year over year to $338 million, while organic net sales were down 6% and adjusted gross margin dropped 90 basis points to 21%.
  • Three months after offloading its snacks business, Hain Celestial reported free cash flow increased to $35 million and debt fell below $145 million year-to-date in the third quarter.
  • Hain plans to support new product launches with substantial marketing and increased distribution over the next three years to make gains sustainable.
  • 12%
  • 2.5 percentage points
  • 13%
  • $338 million
  • 6%
  • 90 basis points
  • 21%
  • $35 million

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