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Document

March 29, 2024

VIA EDGAR

United States Securities and Exchange Commission

Division of Corporation Finance

Office of Manufacturing

100 F Street, N.E.

Washington, D.C. 20549

Attn:    Anne McConnell

Martin James

Re:    The Hain Celestial Group, Inc.

Form 10-K for the Year Ended June 30, 2023

Filed August 24, 2023

File No. 000-22818

Dear Ms. McConnell and Mr. James:

The Hain Celestial Group, Inc. (hereinafter referred to as the “Company” or “we”) submits this letter in response to the comments contained in the letter from the staff of the Division of Corporation Finance (the “Staff”) of the U.S. Securities and Exchange Commission dated March 15, 2024, regarding the above referenced filing and have provided the below responses. For ease of reference, we have repeated the text of each of the Staff’s comments prior to our responses. Further, amounts included within are in thousands, unless otherwise noted.

Form 10-K for the Fiscal Year Ended June 30, 2023

Management's Discussion and Analysis of Financial Condition and Results of Operations
Reconciliation of Non US GAAP Financial Measures to US GAAP Financial Measures, page 34

Staff Comment

1.We note your non-GAAP adjustments related to "Litigation and related costs" and "Productivity and transformation costs". We also note similar adjustments in subsequent Form 10-Qs and an additional non-GAAP adjustment related to "inventory write-downs related to exited categories". Please describe to us, in greater detail, the specific nature of these adjustments and explain how you determined they are appropriate based on the guidance in Question 100.01 of the Division of Corporation Finance's Compliance & Disclosure Interpretations on Non-GAAP Financial Measures since it appears to us they may represent normal operating expenses related to your business. For the annual and subsequent interim periods presented, specifically address the following items.

•For litigation and related costs, quantify amounts related to the securities class action and the baby food litigation. For legal costs related to your products, explain why the costs are not normal operating expenses.

•For productivity and transformation costs, quantify and clarify the specific nature of the costs and activities. In this regard, we note disclosures that the transformation program is intended to improve profitability, build brands, and delivery future growth. Explain why the costs are not normal operating expenses.

•Based on the nature of your business, including the acquisition and disposition of brands, explain how you determined inventory write-downs are not normal operating expenses.

Please be advised this comment is also applicable to the same adjustments included in the multiple additional non-GAAP financial measures you present in Earnings Releases filed under Form 8-K.

Hain Celestial Response

The Company respectfully acknowledges the Staff’s comment. As background, we use non-GAAP financial measures on an internal basis, period-over-period, to evaluate our operating performance, analyze trends within our business, assess our performance relative to our competitors and establish operational goals and forecasts that are used in allocating resources. Furthermore, the Company has adopted a formal non-GAAP policy (the “Non-GAAP Policy”), which it reviews periodically with the Audit Committee (the “Audit Committee”) of the Company’s Board of Directors, to define, calculate and report non-GAAP financial measures. We consider the non-GAAP measures developed in conformance with our Non-GAAP Policy to be useful to external stakeholders as these measures align with how the Company monitors its performance and facilitate a better understanding of the Company’s core operating performance.

In accordance with Question 100.01 of the updated Non-GAAP Compliance and Disclosure Interpretations (“Question 100.01”) and our Non-GAAP Policy, when constructing non-GAAP financial measures, any adjustments should be material, non-recurring, infrequent, and/or unusual in relation to results generated from our normal operating practices. The Company consistently follows and applies its Non-GAAP Policy, which dictates the charges and credits that should be excluded from the Company’s non-GAAP financial measures based on the nature of the item and, in most cases, the quantitative amount of the item. Pursuant to our Non-GAAP Policy, management first applies a quantitative threshold followed by a qualitative assessment to certain items, including litigation-related charges and credits, to determine whether it is appropriate to exclude such items from our non-GAAP financial measures. Once a matter has met the required criteria, all related charges and credits are excluded from the non-GAAP financial measures. These determinations are reviewed and discussed with the Audit Committee.

The Company believes the charges referenced in this comment are incremental charges or gains, in relation to normal operations, which are directly attributable to an associated non-recurring, infrequent and/or unusual activity that occurred during the relevant period. Normal and recurring items are not adjusted from results. Each of the adjustments referenced in the Staff’s comments are discussed in further detail below.

Litigation and Related Costs

The following table details the adjustments for litigation and related costs reflected in the Company’s non-GAAP financial measures for the periods presented, which were associated with the Company’s baby food litigation (the “Baby Food Litigation”), its securities class action (the “Securities Class Action”) and the recently disclosed SEC investigation (the “SEC Investigation”):

  Six Months Ended December 31, 2023  Fiscal Year Ended
June 30, 2023  Fiscal Year Ended
June 30, 2022

Baby Food Litigation  $ 3,196    $ (2,588)   $ 7,262

Securities Class Action  294    1,219    425

SEC Investigation  125    —    —

  $ 3,615    $ (1,369)   $ 7,687

The Company respectfully advises the Staff that the Company does not exclude legal costs associated with its products that it determines to be normal, recurring expenses necessary to operate its business when calculating its non-GAAP financial measures. For example, the Company considers legal expenses occurring during the ordinary course of business to include recurring fees relating to trademarks, product compliance, regulatory compliance, data privacy, real estate leases, and employment advisory work. The Company also incurs legal expenses in connection with litigation during the ordinary course of business, including but not limited to commercial litigation and disputes, and labor and employment litigation and disputes, which are considered routine. While the Company is involved in routine legal matters, certain significant matters have arisen that are well outside the Company’s normal operating activities. In determining whether expenses directly related to the Company’s litigation do not constitute normal, recurring, expenses necessary to operate the business, the Company considers a number of factors, including the frequency of similar litigation and the scope and complexity of the case or related cases.

For the annual and subsequent periods referenced in the Staff’s comment, the expenses excluded when calculating non-GAAP financial measures have primarily been related to the Securities Class Action and the Baby Food Litigation. In addition, starting with the second quarter of its fiscal 2024, the Company included as part of its non-GAAP adjustment expenditures associated with the SEC Investigation as described in Note 17, Commitments and Contingencies in the Notes to the Consolidated Financial Statements included in Part I, Item 1 of our Quarterly Report on Form 10-Q for the period ended December 31, 2023. The Company plans to continue to adjust for expenditures related to the SEC Investigation in the future and will reference the SEC Investigation with specificity in the footnote describing adjustments for litigation and related costs in its future disclosures, since we expect to spend a material amount related to legal support costs as well as other third-party advisory costs in connection with the SEC Investigation. Although we expect that costs associated with the SEC Investigation will span over an extended period and impact multiple fiscal periods, the Company does not consider these anticipated expenses as recurring since they are related to a discrete and clearly defined matter. Each of these three matters has been assessed on a case-by-case basis, has met the requirements of the Non-GAAP Policy and has been reviewed by the Audit Committee.

2

The adjustment for the Securities Class Action relates to three securities class action complaints that were filed in the U.S. District Court for the Eastern District of New York (“EDNY”) in 2016, later consolidated under the caption, In re The Hain Celestial Group, Inc. Securities Litigation. The Securities Class Action names as defendants the Company and certain of its former officers and asserts violations of Sections 10(b) and 20(a) of the Securities Exchange Act of 1934. The allegations in the Securities Class Action do not relate to the Company’s products nor its normal operations, but rather are non-recurring, infrequent, and/or unusual activity. The Company has actively litigated the Securities Class Action for nearly eight years, obtaining dismissal of the lawsuit three times and currently opposing Plaintiffs’ appeal of the most recent dismissal. In 2017, an additional stockholder class action and derivative lawsuit was filed against the Company’s former Board of Directors and certain former officers, alleging violation of securities law, breach of fiduciary duty, waste of corporate assets and unjust enrichment based on the same facts underlying the Securities Class Action. This lawsuit has been stayed for nearly seven years pending final resolution of Defendants’ motions to dismiss in the Securities Class Action, including appeals of decisions adverse to Plaintiffs.

The only legal costs that involve our products for which we have taken non-GAAP adjustments relate to the Baby Food Litigation. There, the products at issue are primarily the Company’s Earth’s Best® baby food products. Since February 2021, the Company has been named in more than 30 consumer class actions, personal injury suits and civil government enforcement actions, the majority of which allege that the Company’s Earth’s Best® baby food products contain unsafe and undisclosed levels of various naturally occurring heavy metals, namely lead, arsenic, cadmium and mercury. These lawsuits were brought in the wake of a highly publicized report issued by the U.S. House of Representatives Subcommittee on Economic and Consumer Policy on Oversight and Reform, dated February 4, 2021, addressing the presence of heavy metals in baby foods made by certain manufacturers, including the Company.

The numerous consumer class action lawsuits filed against the Company have been transferred and consolidated as a single lawsuit in the EDNY captioned In re Hain Celestial Heavy Metals Baby Food Litigation, Case No. 2:21-cv-678 (the “Consolidated Proceeding”), which generally alleges that the Company violated various state consumer protection laws and asserts other state and common law warranty and unjust enrichment claims. One additional consumer class action is pending in New York Supreme Court, Nassau County, which the court has stayed in deference to the Consolidated Proceeding. The Company has been named in one civil government enforcement action, State of New Mexico ex rel. Balderas v. Nurture, Inc., et al., which was filed by the New Mexico Attorney General against the Company and several other manufacturers based on the alleged presence of heavy metals in their baby food products.

In addition to the consumer class actions related to our baby food products described above, the Company has been named in 30 lawsuits in state and federal courts, of which 24 remain pending, alleging some form of personal injury, including neurodevelopmental disorders such as autism and Attention Deficit Hyperactivity Disorder, from the ingestion of the Company’s baby food products, purportedly due to unsafe and undisclosed levels of various naturally occurring heavy metals. Plaintiffs have filed petitions before the Judicial Panel on Multidistrict Litigation to form a multi-district litigation in federal court, and a petition to the Chair of the Judicial Council in California seeking formation of Judicial Council Coordination Proceedings, seeking to consolidate personal injury cases filed in federal courts, and California State Courts, respectively, claiming to do so due to the number of cases filed and the complexity involved. During the periods referenced in the Staff’s comment, the Company was also involved in an additional consumer class action that has been since dismissed.

Due to the breadth and volume of cases impacting the Company and other manufacturers in the industry, the nature of the allegations, in addition to the intermittent timing of recognition of insurance proceeds from the Company’s insurance providers which causes significant variability with respect to the Company’s results, the Company believes that adjusting for expenses and recoveries related to the Baby Food Litigation provides valuable information to investors. In particular, periodic recoveries from the Company’s insurers can be quantitatively significant and yet can vary widely from period to period, as evidenced by the $7.2 million expense associated with the Baby Food Litigation recognized in fiscal 2022 compared to the net $2.6 million benefit recognized in fiscal 2023, which included the recognition of related insurance recoveries reimbursing for certain expenses incurred in prior years. Furthermore, the Company believes that, consistent with its Non-GAAP Policy, adjusting for expenses related to the Securities Class Action and SEC Investigation is appropriate given the unusual and unanticipated nature of the related expenditures. With respect to all three matters for which the Company adjusts for litigation and related expenses, the Company believes that making certain discrete adjustments for these unusual items is beneficial for users of the Company’s financial statements because these expenses/recoveries are not indicative of the Company’s ongoing operational performance. By adjusting for these expenses, the Company’s period-to-period results from business operations become more comparable, helping to form a better understanding of the Company’s underlying financial results and performance. Further, although these litigation and related expenses have been incurred over an extended period and impact multiple fiscal periods, the Company does not consider these expenses as recurring since they are related to a limited set of discrete and clearly defined matters. Moreover, in determining to adjust for these matters, the Company considered that similarly sized and complex matters are uncommon for the Company.

For the reasons noted above, the Company believes that these litigation-related adjustments do not cause its non-GAAP financial measures to be misleading or inconsistent with the guidance in Question 100.01.

3

Productivity and Transformation Costs

In accordance with Question 100.01, we believe that the expenses related to the Company’s productivity and transformation costs are not normal, recurring, cash operating expenses necessary to operate our business. Substantially all of these expenses related to executing initiatives that were either initiated in connection with the Company’s multi-year growth and transformation program (the “Hain Reimagined Program”) or similar discrete and well-defined restructuring actions executed in prior years by the Company in accordance with Accounting Standards Codification