Hain Surges as Food Company Announces Plan to Revamp Operationsby
Hain Celestial Group Inc., a maker of herbal tea and organic snacks, surged almost 10 percent after quarterly sales topped estimates and the company announced a plan to overhaul its operations.
Hain, which suffered a 31 percent stock decline last year, is creating five divisions within its U.S. business, according to a statement on Wednesday. The units will focus on fresh food, baby products, snacks, pantry staples and personal care. The company also named James Meiers to the newly created role of chief operations officer.
Hain, a supplier of organic and natural food to Whole Foods and other grocers, is pursuing $100 million in cost cuts as it tries to reignite sales growth. The company, which has faced stiffer competition as organic food goes mainstream, also has identified brands representing about $30 million in sales that it wants to sell off.
The foodmaker posted $749.9 million in fiscal third-quarter sales on Wednesday, topping the $734.6 million analysts had predicted. It also narrowed its annual sales forecast to $2.95 billion to $2.97 billion, compared with a previous projection of $2.9 billion to $3.04 billion. Hain now expects earnings of $2 to $2.04 a share this year. Earlier, it had predicted $1.95 to $2.10.
The stock jumped as much as 9.7 percent to $45.08 following the announcement, marking the biggest intraday rise in almost four months. Before the rally, Hain was up 1.7 percent in 2016.