The Hain Celestial Group, Inc. Q4 FY2025 earnings call

• Q4 performance was below expectations due to shortfalls in North America (velocity challenges and distribution losses in snacks) and International (external factors like category-wide softness in wet baby food and warm weather impacting soup). • Immediate priorities: optimizing cash, deleveraging balance sheet, stabilizing sales, and improving profitability. Hired an interim Chief Business Transformation Officer to steer cost reduction efforts. • Streamlining portfolio by exiting unprofitable or low-margin SKUs, e.g., exiting the meat-free category in North America by discontinuing the Yves product line. • Accelerating brand renovation and innovation, with new products launching in 2026, e.g., revamping Garden Veggie products and launching Juicy Jelly pouches in the U.K. • Implementing strategic revenue growth management and pricing, with pricing actions taken in Q4 International and underway in North America. • Driving productivity and working capital efficiency, with over $60 million in gross savings expected in fiscal 2026 and plans to reduce inventory levels. • Enhancing digital capabilities, with e-commerce growth expected and social reach increasing in International.

In North America, organic net sales declined 14% year-over-year. Fourth quarter adjusted gross margin was 19.2%, a 340 basis point decrease versus the prior year period, with adjusted EBITDA of $10 million compared to $21 million in the year ago period. In the International business, organic net sales declined 6% in the quarter. International adjusted gross margin was 21.1%, approximately 270 basis points below the prior year period, with adjusted EBITDA of $21 million as compared to $27 million in the prior year period.

• Q1 2026 net sales and adjusted EBITDA expected to be similar to Q4 2025. • Free cash flow expected to be positive for the full year 2026 on disciplined inventory management and payables progress. • Focus on cost cutting and execution against five actions to win in the marketplace to drive stronger top and bottom line performance in the second half of 2026.

• Short-term challenges in North America snacks and International wet baby food and soup categories. • Previous leadership focus on structure, strategy, and process led to inflated cost structure and slow decision-making. • Lack of significant pricing actions in recent years when industry inflation was high, shortchanging innovation and e-commerce. • External factors like warm weather negatively impacting soup in International.

Q: Andrew Lazar asked about managing brand reinvestment with a strained balance sheet.

A: Alison Lewis said they focus on driving financial flexibility across the P&L, focusing investment on high-return areas aligned with five actions to win. Lee Boyce added about unlocking operating model savings, strategic revenue growth management, and credit agreement headroom.

Q: Unknown Analyst asked about differences from Hain Reimagined.

A: Alison Lewis said previous focus was on structure vs. unleashing execution, with current focus on pricing across categories, ramped-up innovation, local empowerment in operating model, and continued productivity and working capital reduction.

Q: Matt Smith asked about strategic review progress.

A: Alison Lewis said they continue making progress on streamlining portfolio, exiting unprofitable businesses, and implementing ongoing portfolio management reviews.

Q: John Baumgartner asked about snacks distribution losses.

A: Alison Lewis said they're hyper-focused on product renovation, digital/social marketing, and ensuring news to retailers, with early green shoots in velocity improvement.

Q: Anthony Vendetti asked about operating model timeline and CEO search.

A: Alison Lewis said operating model changes are underway with two regions (North America and International), restructuring is ongoing with most change effective Oct-Nov, and CEO search is parallel with strategic review by the Board.