Wall Street chewed up and spit out the natural and organic food company Hain Celestial Group on Tuesday after an announcement that it would delay releasing its fourth-quarter and fiscal-year 2016 results.
The Lake Success, NY-based conglomerate said it’s investigating a possible accounting issue in which it might have booked revenue in the wrong quarter.
Its stock tanked 26 percent, to $39.35, nearly erasing its gains for the entire year.
The owner of such brands as Celestial teas, Earth’s Best baby food and Terra chips, Hain said it had “identified concessions that were granted to certain distributors in the United States” and that it was investigating whether the revenues associated with the concessions were booked during the correct period.
Just as troubling, Hain’s chief financial officer and chief accounting officer have left in recent months.
The company didn’t name any names, but United Natural Foods and Walmart are its two biggest sales drivers, accounting for 12 percent and 10 percent of revenue, respectively, according to its latest annual report.
Once the dominant player in the better-for-you food category, Hain is facing stiffer competition from the likes of Costco — the largest seller of organic foods — and consumer product companies like General Mills, Kellogg’s and Hershey Foods, which have all acquired smaller natural food companies.
“They are all building their platforms to compete with Hain,” said Dan Glickberg, principal of Rodeo CPG, a food advisory firm and venture capital fund.
Hain founder and Chief Executive Irwin Simon has said during past earnings calls that major consumer packaged goods companies are taking market share from Hain.
The company also said it does not expect to achieve its previously announced guidance for fiscal 2016.