HAIN to Divest North American Snacks Business to Focus on Core Areas

The Hain Celestial Group, Inc. HAIN has taken a decisive step to refine its business strategy by entering into a definitive agreement to sell its North American Snacks business, including the Garden Veggie Snack, Terra, and Garden of Eatin’ brands, to Snackruptors Inc. for $115 million in cash. This divestment marks a key milestone in Hain Celestial's ongoing portfolio optimization strategy, enabling the company to simplify its North American operations and refocus on categories with higher margins and cash flow potential.

The North American segment faced significant challenges in the first quarter of fiscal 2026, with net sales declining 12% and organic net sales decreasing 7%, primarily due to weaker snack volumes. Hain Celestial's North American snacks business accounted for 22% of fiscal 2025 consolidated net sales and 38% of North America segment revenue, yet it generated minimal EBITDA over the past 12 months, highlighting its limited profitability contribution.

Conversely, Hain Celestial's remaining North American portfolio demonstrates significantly stronger financial performance, with low double-digit EBITDA margins supported by gross margins above 30%. After the divestiture, Hain Celestial will focus on core categories such as tea, yogurt, baby and kids nutrition and meal preparation platforms, anchored by brands including Celestial Seasonings, The Greek Gods, Earth's Best Organic and Spectrum Organic.

CEO Alison Lewis described the transaction as a decisive step toward sharpening Hain Celestial's strategic focus on areas where it can best utilize its capabilities. Lewis stated that the proceeds will be used to reduce debt, strengthening the company's leverage profile and enhancing financial flexibility, which is expected to support further investment and sustainable growth.

The divestment marks a pivotal milestone for Hain Celestial. By sharpening its strategic focus and reinforcing its financial foundation, the company is positioning itself to enhance shareholder value and pursue long-term growth in categories where it holds clear competitive strengths. The transaction is expected to close by Feb. 28, 2026.

Zacks Rundown for HAIN

HAIN’s shares have plunged 19.1% in the past six months against the industry's growth of 10.4%. HAIN presently carries a Zacks Rank #4 (Sell).

From a valuation standpoint, HAIN trades at a forward price-to-earnings ratio of 17.66, higher than the industry’s average of 15.02.

The Zacks Consensus Estimate for HAIN’s current fiscal-year sales & earnings implies a year-over-year decline of 3.9% and 122.2%, respectively.

Better-Ranked Stocks to Consider

The Simply Good Foods Company SMPL, a consumer-packaged food and beverage company, engages in the development, marketing, and sale of snacks and meal replacements, and other products in North America and internationally. SMPL currently flaunts a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

The Zacks Consensus Estimate for Simply Good Foods' current fiscal-year sales implies a decline of 0.3%, and the same for current fiscal-year earnings implies growth of 1.6% from the year-ago reported figures. SMPL delivered a trailing four-quarter earnings surprise of 5.53%, on average.

Kimberly-Clark Corporation KMB, together with its subsidiaries, manufactures and markets personal care products in the United States. KMB currently carries a Zacks Rank #2 (Buy).

The Zacks Consensus Estimate for Kimberly-Clark's current fiscal-year sales and earnings implies a decline of 2.1% and 6.2%, respectively, from the year-ago actuals. KMB delivered a trailing four-quarter earnings surprise of 18.9%, on average.

Medifast, Inc. MED, through its subsidiaries, operates as a health and wellness company that provides habit-based and coach-guided lifestyle solutions to address obesity and support a healthy life in the United States. MED currently carries a Zacks Rank #2.

The Zacks Consensus Estimate for McCormick's current fiscal-year sales and earnings implies a decline of 36.7% and 156.5%, respectively, from the year-ago actuals. MED delivered a trailing four-quarter negative earnings surprise of 640%, on average.

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

This article originally published on Zacks Investment Research (zacks.com).

Zacks Investment Research