Overview
Honest Company Q3 revenue misses analyst expectations, declining 6.7% yr/yr
Adjusted EBITDA for Q3 beats analyst expectations, reflecting operational efficiency
Company launches Transformation 2.0, exiting lower margin categories to enhance profitability
Outlook
Company updates full-year 2025 revenue outlook to range from -3% to flat
Company expects full-year 2025 adjusted EBITDA of $21 to $23 mln
Company projects full-year 2025 organic revenue growth of 4-6%
Result Drivers
TRANSFORMATION 2.0 - Launch of program to exit lower margin categories and optimize cost structure to enhance profitability
REVENUE DECLINE - Revenue decreased due to strategic exits from Honest.com fulfillment and apparel, affecting retail revenue
NET INCOME IMPROVEMENT - Positive net income achieved through disciplined execution and operational efficiency, per CEO Carla Vernón
Key Details
Metric | Beat/Miss | Actual | Consensus Estimate |
Q3 Revenue | Miss | $92.57 mln | $99.40 mln (6 Analysts) |
Q3 Net Income | $758,000 | ||
Q3 Adjusted EBITDA | Beat | $3.52 mln | $2.53 mln (4 Analysts) |
Q3 Gross Margin | 37.3% |
Analyst Coverage
The current average analyst rating on the shares is "buy" and the breakdown of recommendations is 5 "strong buy" or "buy", 2 "hold" and no "sell" or "strong sell"
The average consensus recommendation for the miscellaneous specialty retailers peer group is "buy"
Wall Street's median 12-month price target for Honest Company Inc is $7.25, about 54.1% above its November 4 closing price of $3.33
The stock recently traded at 33 times the next 12-month earnings vs. a P/E of 51 three months ago
Press Release: ID:nGNX3zRsvQ
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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.)