Business Context and Reporting Period
Company: The Hain Celestial Group, Inc. (HAIN)
Filing Type: Form 10-K (Annual Report)
Reporting Period: Fiscal year ended June 30, 2026
Business Overview: A global health and wellness company operating in two segments: North America and International. The company is undergoing a significant strategic review, having completed the sale of its North American Snacks business and entered into an agreement to sell its International business.
Key Financial Metrics
| Metric | Fiscal 2026 | Fiscal 2025 |
|---|---|---|
| Net Sales | $1,353.4 million | $1,559.8 million |
| Gross Profit | $272.1 million (20.1% margin) | $334.1 million (21.4% margin) |
| Operating Loss | $(203.5) million | $(461.6) million |
| Net Loss | $(304.9) million | $(530.8) million |
| Adjusted EBITDA | $89.0 million | $113.8 million |
| Free Cash Flow | $57.7 million | $(3.2) million |
| Total Debt (Net of issuance costs) | $557.8 million | $704.8 million |
| Cash and Cash Equivalents | $58.1 million | $54.4 million |
Material Changes vs. Prior Period
- Revenue Decline: Net sales decreased 13.2% to $1.35 billion, driven primarily by the divestiture of the North American Snacks business (impacting sales by $208.2 million) and organic declines in the International segment.
- Impairment Charges: The company recorded $193.2 million in goodwill impairment and $27.4 million in long-lived asset/intangible impairments. This is a significant reduction from Fiscal 2025, which saw $428.9 million in goodwill impairments.
- Profitability Improvement: While the company reported a net loss, the loss narrowed by 42.6% compared to the prior year, largely due to reduced impairment charges and a $25.9 million insurance claim proceeds.
- Debt Reduction: Total debt decreased by $147.0 million, utilizing proceeds from the North American Snacks sale to pay down term loans.
- Segment Performance: North America sales dropped 22.9% due to the snack divestiture, while International sales were relatively flat (-0.4%) despite organic declines offset by favorable foreign exchange.
Guidance, Outlook, Risks, and Unusual Items
Strategic Transactions
- North American Snacks Sale: Completed February 27, 2026. Received $111.2 million cash; $101.1 million used to reduce debt.
- International Business Sale (Pending): Agreed September 12, 2026, to sell International operations to AURELIUS for an estimated gross price of $323.2 million. Net proceeds expected between $305.0 million and $310.0 million.
- Closing Conditions: The International sale is contingent on regulatory approvals and, critically, an amendment to the Credit Agreement to extend the maturity date by at least nine months by October 12, 2026.
Liquidity and Going Concern
- Debt Maturity: The Credit Agreement matures on December 22, 2026. The company has $558.0 million in debt obligations due within one year.
- Going Concern Warning: The auditor has expressed substantial doubt about the company's ability to continue as a going concern due to the uncertainty of refinancing or repaying the debt at maturity. Management is actively negotiating with lenders.
Risks and Contingencies
- Stock Listing: The company received notice from Nasdaq regarding failure to comply with the minimum bid price requirement (stock trading below $1.00). A reverse stock split is being considered.
- Legal Proceedings: Significant ongoing litigation regarding heavy metals in Earth's Best baby food products. A securities class action settlement of $35.0 million was reached, to be funded solely by insurance.
- Restructuring: A multi-year restructuring program is ongoing, with cumulative charges expected to reach $135-$145 million, concluding in Fiscal 2028.
Investor Verification Checklist
- Debt Refinancing Status: Verify if the Credit Agreement amendment (extending maturity past December 2026) has been executed by the October 12, 2026 deadline.
- International Sale Closing: Monitor the completion of the International Business Transaction and the actual net proceeds received.
- Nasdaq Compliance: Confirm if the company has regained compliance with Nasdaq listing standards or executed a reverse stock split.
- Legal Exposure: Track developments in the baby food heavy metals litigation, specifically the summary judgment motions and potential settlement costs not covered by insurance.
- Goodwill Impairment Risk: Assess the remaining $216.7 million of goodwill in the U.S. reporting unit for potential future impairment given the company's depressed market capitalization.