Hawkins Q1 revenue slightly beats estimates

Overview

• US water treatment and specialty ingredients firm's fiscal Q1 revenue grew 8%, slightly beating analyst expectations

• Adjusted EBITDA for fiscal Q1 rose 1% but missed analyst estimates

• Company acquired Aqua-Chem, Inc. to expand Water Treatment segment

Outlook

• Hawkins expects to return to historical organic revenue growth rates in fiscal 2027

• Company expects full-year effective tax rate of 25% to 27%

• Hawkins plans to continue paying down debt and investing in higher-margin businesses in fiscal 2027

Result Drivers

• SEGMENT GROWTH - All segments contributed to revenue growth, with Water Treatment up 6%, Food Health Sciences up 9%, and Industrial Solutions up 10%

• ACQUISITIONS - Water Treatment segment growth was supported by $6.9 mln in added sales from acquired businesses, including Aqua-Chem

• MARGIN PRESSURE - Gross profit growth was limited by higher LIFO reserve charges and increased freight costs not fully recovered through customer charges

Company press release: ID:nGNXbBQqDQ

Key Details

*Applies to a deviation of less than 1%; not applicable for per-share numbers.

Analyst Coverage

• The current average analyst rating on the shares is "buy" and the breakdown of recommendations is 2 "strong buy" or "buy", 2 "hold" and no "sell" or "strong sell"

• The average consensus recommendation for the diversified chemicals peer group is "buy"

• Wall Street's median 12-month price target for Hawkins Inc is $184.00, about 28.7% above its July 28 closing price of $143.02

• The stock recently traded at 32 times the next 12-month earnings vs. a P/E of 34 three months ago

Reuters Recommended Reads

• July 28 - Veralto Q2 results beat estimates on industrial water treatment demand; raises outlook

• July 28 - Xylem raises annual profit forecast as AI growth lifts demand for water-treatment equipment

• July 28 - Ashland Q3 profit beats on higher volume, pricing; cuts FY EPS forecast

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(This story was created using Reuters automation and AI based on LSEG and company data. It was checked and edited by a Reuters journalist prior to publication.)