Hain Celestial Group (HAIN) Detracted in Q2. Here's Why

Madison Investments, an investment advisor, released its “Madison Small Cap Fund” second-quarter 2025 investor letter. A copy of the letter can be downloaded here. The second quarter started as a continuation of the first quarter. As the liberation day tariffs were catastrophic, sending both equities and treasuries steeply lower. Later, the administration set a pause in the tariff implementation, which led equities to rebound, supported by better-than-expected macroeconomic data, particularly regarding inflation and employment. The Russell 2000 Index is up 8.5% for the quarter and down only 1.79% year-to-date. The Madison Small Cap Fund (class Y) returned 4.42% in the quarter, lagging the Russell 2000 and Russell 2500. In addition, please check the fund’s top five holdings to know its best picks in 2025.

In its second-quarter 2025 investor letter, Madison Small Cap Fund highlighted stocks such as The Hain Celestial Group, Inc. (NASDAQ:HAIN). The Hain Celestial Group, Inc. (NASDAQ:HAIN) engages in the manufacturing and marketing of organic and natural products. The one-month return of The Hain Celestial Group, Inc. (NASDAQ:HAIN) was -15.29%, and its shares lost 81.70% of their value over the last 52 weeks. On September 17, 2025, The Hain Celestial Group, Inc. (NASDAQ:HAIN) stock closed at $1.44 per share, with a market capitalization of $130.022 million.

Madison Small Cap Fund stated the following regarding The Hain Celestial Group, Inc. (NASDAQ:HAIN) in its second quarter 2025 investor letter:

"The decrease in food consumption is particularly noticeable in ultra-processed, calorie-dense items like chips, savory snacks, sweet bakery goods, sides, and cookies, with reductions ranging from 6.7% to 11.1%. Our worst performing food stock was The Hain Celestial Group, Inc. (NASDAQ:HAIN). Turnarounds are often difficult, however in the broader environment of shrinking volumes and frugal consumer consumption, that difficulty is magnified. Hain’s Q1 results were particularly disappointing as volumes in what was in our opinion, one of its best salty snack brands declined sharply. The board intervened, the CEO was replaced, and strategic alternatives are on the table. With limited visibility on leadership, the business, and the broader environment, we decided to exit this small investment position entirely.

It has been a challenging two years for most food and staple companies since the inflationary COVID days, as consumers have traded down and volumes have declined. Although we’ve sold most of our investment in the face of these headwinds, we kept a small position waiting for the new management team (brought in 1.5 years ago) to right the ship. Instead, the business took another leg down, and we’ve decided to fully move on."

The Hain Celestial Group, Inc. (NASDAQ:HAIN) is not on our list of 30 Most Popular Stocks Among Hedge Funds. According to our database, 18 hedge fund portfolios held The Hain Celestial Group, Inc. (NASDAQ:HAIN) at the end of the second quarter, compared to 29 in the previous quarter. While we acknowledge the potential of The Hain Celestial Group, Inc. (NASDAQ:HAIN) as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you're looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the best short-term AI stock.

In another article, we covered The Hain Celestial Group, Inc. (NASDAQ:HAIN) and shared the list of undervalued defensive stocks to buy according to analysts. In addition, please check out our hedge fund investor letters Q2 2025 page for more investor letters from hedge funds and other leading investors.

READ NEXT: The Best and Worst Dow Stocks for the Next 12 Months and 10 Unstoppable Stocks That Could Double Your Money.

Disclosure: None. This article is originally published at Insider Monkey.