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Honest Co. Earnings Top Expectations

Playa Vista-based Honest Co. Inc.’s first-quarter earnings landed slightly above estimates presented in the prospectus for the company’s May 5 public debut on the Nasdaq.

The maker of nontoxic and eco-friendly personal and household products reported a net loss of $4.5 million on $81 million in revenue for the quarter that ended March 31. Sales were up 12% compared to the first quarter of 2020, which benefited from consumers stocking up at the onset of the Covid-19 pandemic.

“This was on top of 36% growth (from 2019 to 2020), which represents a two-year stack of 48% of topline growth,” Chief Financial Officer Kelly Kennedy told analysts during the June 16 earnings call.

Honest Co. offers three product categories: diapers and wipes, skin and personal care, and household and wellness. The first category contributed $49.5 million in quarterly revenue, a 2% dip the company attributed to its transition to new “clean conscious diapers” and “pantry loading” that benefited the first quarter of 2020.

Skin and personal care products added $26.2 million, a 42% increase, driven by sales volume from incremental investments in digital marketing and expanded distribution with the company’s retail partners, according to Kennedy.

The household and wellness category posted the biggest year-over-year uptick — 53% — and accounted for $5.2 million in revenue. The growth was “fueled by our sanitization and disinfecting products that we introduced in the second half of 2020,” Kennedy said, adding, “we are starting to see households and retailers de-stock sanitization and disinfecting products as more consumers become vaccinated and return to their pre-Covid routines.”

At $42.5 million, ecommerce accounted for a majority of the company’s revenue, while sales at brick-and-mortar retailers like Costco Wholesale Corp., Target Corp., Walgreen Co. and others, added up to $38.6 million.

Mediha DiMartino
Mediha DiMartino
Mediha DiMartino covers retail, manufacturing and the ports. She can be emailed here.

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