The Hain Celestial Group, Inc. Q1 FY2026 earnings call

• First quarter results were in line with expectations; sequential improvement in organic net sales trends in both segments. North America segments like Beverages, Baby and Kids, Meal Prep turned to growth. International Meal Prep growth offset baby food softness. • Progress on turnaround journey with cost discipline, SG&A reduction, and execution of '5 actions to win'. • Streamlined portfolio by exiting unprofitable SKUs, e.g., meat-free category in North America. • Accelerated innovation pipeline with new product launches like revamped Garden Veggie Snacks, Greek Gods single-serve, Earth's Best big kids snacks, etc. • Implemented pricing actions, with International pricing elasticities in line with expectations, and North America pricing beginning to show benefits. • Drove operational productivity with $60M+ target for fiscal 2026, reduced net inventory in North America, and improved days payable outstanding. • Shifted to digital-first marketing model with positive return on ad spend, e.g., Earth's Besties CRM program and Ibotta partnership.

In the first quarter, North America organic net sales declined 7% year-over-year. Adjusted gross margin in North America was 22.7%, a 200 basis point increase versus the prior year period, with adjusted EBITDA of $17 million, an increase of 37% from the year ago period. International organic net sales declined 4% in the quarter, with adjusted gross margin at 15.7%, approximately 530 basis points below the prior year period, and adjusted EBITDA was $13 million, a 38% decrease compared to the prior year period.

• Not providing numeric guidance on fiscal 2026 operating results but expects free cash flow to be positive. • Expect stronger top and bottom line performance in second half vs first half. • Stepped up marketing investment in Q2 2026 by ~$2M from prior year. • Approximately $3M headwind in Q2 from bonus accrual. • Benefits from SG&A work and pricing to build throughout the year. • Accelerated marketing and innovation to drive improvement in Ella's Kitchen in second half.

• Industry-wide softness in certain categories like wet baby food in International. • Consumer value-seeking behavior could impact sales. • Competitive dynamics that may affect elasticity of pricing actions. • Outcomes and timing of strategic review could introduce uncertainty.

Q: Would you anticipate the year-over-year rate of decline in organic sales to continue to moderate sequentially in 2Q versus Q1?

A: Yes, you can see some moderation. Biggest focus is second half vs first half. Improvement in areas like snacks, moderation in Baby and Kids (especially Ella's), improvement in Beverages (tea and private label, nondairy beverage), and Meal Prep is stable overall.

Q: What are you seeing around elasticity as a starting point for pricing actions in North America?

A: Pricing on tea and baby flowed through in North America in the quarter. On tea, it's generally in line with 1% elasticity expectation. On baby, it's early days but early data looks in line. Need to be dynamic due to competitive dynamics.