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Bernstein Suspends Coverage Of Hain Celestial Amid Accounting Issues Announcement

Bernstein Suspends Coverage Of Hain Celestial Amid Accounting Issues Announcement - The Hain Celestial Group, Inc. NASDAQ:HAIN

Bernstein has suspended the coverage of Hain Celestial Group Inc (NASDAQ: HAIN) pending resolution of the accounting issues announced by the company. Bernstein previously had an Outperform rating on the shares.

Hain Celestial, an organic and natural products company, said it would delay the release of its fourth quarter and full year results for FY16 and has filed for a 15-day extension to its filing of its 10-K, as it is evaluating the following two items:

  • "Its internal control over financial reporting."
  • "Whether the timing of recognizing revenues associated with concessions to distributors was appropriate."

In the past, the company has recognized revenue related to the sale of its products to certain distributors at the time the products are shipped to such distributors. The company is now evaluating whether the revenue associated with the concessions granted to certain distributors should instead have been recognized at the time of sale of products to the end customers.

Related Link: Hain Celestial Plummets 30%: Could You Have Seen It Coming?

That said, the company expects these timing issues should not impact the total amount of revenue ultimately recognized by the company, offering a modest source of comfort for the investors.

The company also noted that it does not expect to achieve its previously announced guidance for FY16. The company's earlier FY16 outlook had called for total net sales in the range of $2.946 billion to $2.966 billion, and EPS between $2.00 and $2.04. Consensus is currently at $2.03.

On May 4, at the time of third quarter earnings call, Hain expected to return to a FY15 margin level in FY17.

"However, with FY16 results now reportedly below previous guidance, this begs the question of whether another rebasing of earnings will be required," analyst Alexia Howard wrote in a note.

Shares of Hain Celestial closed Monday's regular trading session at $53.40, down 3.5 percent. Shares were set to open Tuesday lower, as they plunged 27.81 percent in the pre-market hours to $38.55; at time of publication, the stock was down 25.75 percent at $39.65.

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DateFirmActionFromTo
Aug 2016BernsteinTerminatesOutperform
Aug 2016BarclaysDowngradesOverweightEqual-weight
Aug 2016PiperJaffrayDowngradesNeutralUnderweight

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