Hain Celestial Sheds Low-Margin Snack Unit in Strategic Overhaul

In a decisive move to reshape its business, Hain Celestial Group has announced the divestiture of its North American snack operations. The company confirmed on Monday the sale of the segment, which includes brands like Terra Chips and Garden Veggie Snacks, to Snackruptors Inc. for $115 million in cash. This transaction signals a radical strategic pivot under the leadership of CEO Alison Lewis, who assumed the role in December.

The deal, expected to close by February 28, 2026, involves sacrificing a significant revenue stream to boost overall margins. In the 2025 fiscal year, the North American snack business accounted for approximately 38% of the company's regional sales and 22% of its global revenue. Despite this substantial volume, the segment contributed negligibly to EBITDA over the past twelve months. By removing these low-profit drivers, management aims to unlock greater profitability for the consolidated entity. The net proceeds from the sale are designated entirely for debt reduction, strengthening the corporate balance sheet.

Should investors sell immediately? Or is it worth buying Hain Celestial?

A "Shrink-to-Grow" Blueprint Gains Traction

CEO Alison Lewis's strategy focuses on creating a more streamlined and profitable portfolio. Post-divestment, Hain Celestial will concentrate on its core categories: tea (Celestial Seasonings), yogurt, and baby food. For this refined business, leadership projects gross margins exceeding 30% and an EBITDA margin in the low double-digit range. The market responded favorably to this clear shift in direction, sending the company's shares higher on the announcement day.

The company is scheduled to release its second-quarter earnings before the market opens on Monday, February 9, 2026. During the subsequent conference call with analysts, the executive team is anticipated to provide detailed guidance on how the removal of the snack division's volume will impact the financial outlook for the remainder of the fiscal year.