NASDAQ$HNST

Honest Co Inc/The · Q1 2023 earnings

Q1 2023 earnings · · Investor relations

Briefing

Reported a 21% increase in revenue and launched a Transformation Initiative to enhance profitability and enable future growth.

The Honest Company reported a strong first quarter with a 21% increase in revenue driven by growth in both digital and retail channels. The company launched a Transformation Initiative aimed at improving the cost structure and driving long-term value creation. They are raising the full year revenue outlook.

  • Revenue increased by 21% compared to the first quarter of 2022, reaching $83 million.
  • Digital and retail channels both experienced growth of over 20% during the quarter.
  • The company launched a Transformation Initiative focused on brand maximization, margin enhancement, and operating discipline.
  • Full year 2023 revenue outlook is increased to be up low-single digits versus revenue reported for the full year 2022.

Headline financials

Total Revenue

$83.4M

Previous: $68.7M+21.3%
EPS (adj)

-$0.20

Previous: -$0.16-25.0%
Capital Expenditures

-$473K

Previous: -$240K-97.1%
Free Cash Flow

-$19.3M

Previous: -$14.9M-30.1%
Net Income

-$18.9M

Previous: -$14.6M-29.0%
Operating Income

-$18.7M

Previous: -$14.5M-28.3%
Gross Profit

$20.2M

Previous: $20.6M-2.1%
Cash & Equivalents

$9.22M

Previous: $44.7M-79.4%
Total Assets

$213M

Previous: $257M-16.9%
Stock-Based Comp

$3.77M

Previous: $3.55M+6.3%

Revenue & EPS history

Honest Co · Revenue · Quarterly

$83.4M

Q1 2023+21.3%vs Q1 2022
Beat estimate in 13 of 15 quarters(87%)
ActualEstimate

Forward guidance

The Company is increasing its full year 2023 revenue outlook to be up low-single digits versus revenue reported for the full year 2022. Adjusted EBITDA is expected to be in the range of negative $25 million to negative $30 million.

Tailwinds

  • Continued positive tracked channel consumption
  • Benefit of additional price increases in 2023

Headwinds

  • Transformation Initiative impact of exiting low-margin businesses, expected to begin in the second quarter
  • Comparing against prior year pipeline shipments that supported significant retail distribution growth in the second half of 2022

Historical earnings impact

How earnings announcements have historically affected this stock's price.

Avg. return before/after earnings

Based on 20 quarterly earnings reports · overlaid with Q1 2023

Historical avgQ1 2023

+1.1%

Avg return

Earnings day

+2.5%

Avg return

5 days after

-0.6%

Avg return

30 days after

52%

13 / 25 earnings

Positive

+34.4%

Q1 2023

Best reaction

-37.6%

Q4 2022

Worst reaction

Earnings price reactions
QuarterReport dateReaction (Day 0)+5 days+30 days
Q1 2026-1.7%-4.9%-6.1%
Q4 2025+21.2%+22.9%+24.7%
Q3 2025-29.5%-23.6%-17.9%
Q1 2025-8.8%+6.9%+7.5%
Q4 2024-11.8%-9.2%-16.5%
Q3 2024+23.7%+42.2%+43.0%
Q2 2024+17.9%+28.2%+28.8%
Q1 2024+12.6%+14.0%-7.2%
Q4 2023+31.4%+56.2%+26.8%
Q3 2023+20.3%+13.4%+101.2%
Q2 2023+0.0%+1.4%+9.4%
Q1 2023+34.4%+28.7%-0.6%
Q4 2022-37.6%-36.9%-35.8%
Q3 2022+7.0%+10.2%-13.7%
Q2 2022+14.3%+11.5%+9.9%
Q1 2022+17.1%+8.2%-1.7%
Q4 2019+12.6%+5.6%-13.0%
Q4 2021-21.5%-11.6%-29.9%
Q3 2021+9.7%+6.6%-11.0%
Q3 2020+9.7%+6.6%-11.0%
Q2 2021-30.6%-33.2%-27.0%
Q2 2020-30.6%-33.2%-27.0%
Q4 2020-11.3%-15.6%-15.1%
Q1 2020-11.3%-15.6%-15.1%
Q1 2021-10.6%-16.5%-18.0%

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