Hain Celestial (HAIN) investors seem to be welcoming the positive signs of the company’s turnaround strategy, but there is still a lot of work to be done for the snack and wellness company.

On Tuesday, chipmaker Terra beat Wall Street’s low expectations for its fourth-quarter results. Adjusted earnings per share came in at $0.13, 5 cents above estimates. Revenue for the quarter was $418.80 million, just above the $418.67 million expected.

CEO Wendy Davidson, who is leading a multi-year transformation of the company, told Yahoo Finance that current trends are playing into the company’s hands.

“The consumer is looking for healthier options, so the trends are in our favor. Plus, we’re seeing the economy starting to stabilize and so people are making those choices,” she told Yahoo Finance.

With shoppers looking for special offers and different pack sizes, she says the team is focused on “ensuring value for money” while also focusing on quality and ease of use.

Competition in this space is heating up, as seen with Walmart’s (WMT) premium private label BetterGoods. Davidson said the company plans to increase its promotional activities in the fiscal third quarter and expand distribution to differentiate itself.

“Our goal is for our marketing message to be the first thing that comes to mind and for our range of products available for sale to be the first thing found,” she said.

Distribution points such as convenience stores can give the company a competitive advantage as consumers look for healthier options on the go.

“We know that the convenience consumer, whether it’s a meal or a convenience purchase, is looking for options that are better for them,” she said.

John Baumgartner, managing director of Mizuho Securities, told Yahoo Finance that Walmart is not the only one knocking on Hain’s door, nor is it the only player with an eye on the gas stations.

“If you think about the competition in this space, you have the UTZ brand … Boulder Canyon is getting very aggressive in distribution, Fritos is obviously in there, you have SmartFood, Stacy, there are other brands in the category that are going to try to get in the natural organic space,” he said.

In fiscal 2024, sales of Hain’s out-of-home products such as snacks and teas grew by a low double-digit percentage. The number of convenience stores in which the company is present increased by 42% during the year.

CEO Wendy Davidson, a former executive at meat producer Tyson Foods (TSN), spice maker McCormick (MKC) and Kellogg’s, now known as Kellanova (K) and WK Kellogg (KLG), outlined a plan last fall to drive long-term growth and shareholder returns.

The story continues

Davidson, who took over the top job at Hain’s in January 2023, is targeting sustainable revenue and profit growth through fiscal 2027. The company wants to redesign its supply chain, modernize its digital infrastructure and create a performance-oriented culture.

As part of its turnaround plan, Hain plans to save $130 million to $150 million annually through restructuring through 2027. In the first year since the plan was implemented, the company achieved savings of $65 million, exceeding its $61 million goal.

The company expects flat or better revenue growth, mid-single-digit adjusted earnings growth and free cash flow of $60 million for fiscal 2025. Shares rose 19% on Tuesday.

But there are still skeptics on Wall Street after years of underperformance. Hain’s shares have fallen 28 percent since the beginning of the year.

CFRA analyst Arun Sundaram said in a note to clients that he was “pleased with recent results” and “hopeful” that the company “can achieve its fiscal year 2027 targets,” but remains on the sidelines with a “hold” rating.

—

Brooke DiPalma is a senior reporter at Yahoo Finance. Follow her on Twitter at @Subscribe or email her at [email protected].

Click here to get all the latest retail stock news and events to optimize your investment strategy