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Dec 31, 2025
Honest Co Q4 2025 Earnings Report
Honest Co Q4 2025 Earnings Report
Key Takeaways
The Honest Company reported Q4 2025 results that met expectations despite a revenue decline driven by strategic exits from lower-margin categories like apparel and Canadian retail. While GAAP net loss widened significantly due to restructuring charges, the company achieved positive Adjusted Net Income and Adjusted EBITDA, and announced its first-ever $25 million share repurchase program.
Revenue decreased 11.8% to $88.0 million, primarily due to strategic exits under the 'Powering Honest Growth' transformation plan.
Organic revenue grew 0.7% in Q4, driven by strength in wipes and baby personal care categories.
The company authorized its inaugural share repurchase program for up to $25 million of common stock.
GAAP gross margin fell to 15.7% due to a $15.9 million apparel inventory write-down and asset impairments, though Adjusted Gross Margin remained stable at 38.3%.
Revenue by Segment
Revenue by Geographic Location
Forward Guidance
For the full year 2026, Honest Co expects revenue to decline on a reported basis due to category exits but anticipates organic growth and margin expansion.
Positive Outlook
- Organic revenue growth expected between 4% to 6%
- Adjusted Gross Margin projected in the low 40%s
- Adjusted EBITDA expected between $20 million and $23 million
- Continued expansion of Adjusted EBITDA Margin
- Strong balance sheet with no debt to support share repurchases
Challenges Ahead
- Reported revenue expected to decrease 16% to 18% due to exited streams
- Loss of $38.5 million in annual apparel revenue
- Loss of $35.3 million in revenue from Honest.com fulfillment
- Loss of $3.4 million in revenue from Canadian channels
Historical Earnings Impact
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Avg. Return Before/After Earnings
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