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Sep 30, 2023
Honest Co Q3 2023 Earnings Report
Reported record revenue and highest gross margin in two years, driven by the Transformation Initiative.
Key Takeaways
The Honest Company reported a 2% increase in revenue to $86 million, driven by strong retail consumption, growth in the Digital channel, strong baby clothing performance, and the benefit of price increases. The company's gross margin was 31.6%, the highest in the last two years, and the net loss was $8 million. The company raised its revenue and Adjusted EBITDA outlook for the full year 2023.
Revenue increased 2% to $86 million.
Gross margin was 31.6%, the highest in the last two years.
Net loss was $8 million, including $2 million in Transformation Initiative costs.
The company ended the quarter with $23 million in cash, cash equivalents and short-term investments.
Honest Co
Honest Co
Forward Guidance
The Company’s outlook for Fourth Quarter Revenue and Adjusted EBITDA reflects continued topline momentum and margin-enhancing benefits of the Transformation Initiative.
Positive Outlook
- Continued positive tracked channel consumption
- Growth in the digital channel
- Benefit of price increases
- Significant gross margin expansion versus the year-ago period
- Operating expense discipline
Challenges Ahead
- Transformation Initiative impact of SKU rationalization
- Exiting low-margin products
- Adjusted EBITDA outlook includes approximately $1.0 million in Transformation Initiative costs.