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Jun 30, 2023
Honest Co Q2 2023 Earnings Report
Honest Co's revenue increased driven by retail consumption, digital channel growth, new revenue from baby clothing, and price increases, but net loss also increased.
Key Takeaways
The Honest Company reported an 8% increase in revenue for Q2 2023, reaching $85 million, driven by retail consumption and digital channel growth. However, the company's net loss increased to $13 million. The company is increasing its full year 2023 revenue outlook to be up low-single to mid-single digits versus revenue reported for the full year 2022.
Revenue increased by 8% to $85 million.
Digital revenue increased 10%, supported by point-of-sales growth and baby clothing business.
Net loss for the second quarter of 2023 was $13 million.
Net cash provided by operating activities was $4 million.
Revenue by Geographic Location
Forward Guidance
The Company is increasing its full year 2023 revenue outlook to be up low-single to mid-single digits versus revenue reported for the full year 2022. Adjusted EBITDA is expected to be in the range of negative $22 million to negative $26 million.
Positive Outlook
- Continued positive tracked channel consumption
- Growth in digital
- Price increases
- Anticipated reduced costs associated with the Transformation Initiative.
Challenges Ahead
- Transformation Initiative impact of SKU rationalization
- Exiting low-margin businesses and products
- Comparing against prior year pipeline shipments that supported significant retail distribution growth in the second half of 2022, particularly in the third quarter.
- Adjusted EBITDA includes an estimated $8 million to $10 million out of the total $10 million to $13 million in costs related to the Transformation Initiative.
Historical Earnings Impact
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Avg. Return Before/After Earnings
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