Honest Co Inc/The · Q4 2023 earnings

Briefing

Honest Co's Q4 2023 performance was driven by its Transformation Initiative, resulting in double-digit revenue growth and improved gross margin. The company achieved positive net income and Adjusted EBITDA during the quarter.

The Honest Company reported a 10% increase in revenue to $90 million in Q4 2023, driven by growth in the digital channel, volume growth, and price increases. The company achieved positive net income of $1 million and positive Adjusted EBITDA of $4 million. Gross margin improved to 33.5%, and operating expenses decreased by $6 million.

• Revenue increased by 10% to $90 million, driven by growth in the Digital channel, volume growth and the benefit of price increases.
• Gross margin increased to 33.5% compared to 27.5% in the fourth quarter of 2022, driven by cost savings and price increases.
• Net income was $1 million compared to net loss of $13 million in the fourth quarter of 2022.
• Adjusted EBITDA was $4 million and included $0.2 million in costs related to the Transformation Initiative.

Headline financials

Revenue & EPS history

In fiscal year 2024, the Company expects to continue driving benefits from its three Transformation Initiative Pillars of Brand Maximization, Margin Enhancement, and Operating Discipline. Therefore, the Company expects the following financial outlook for the full fiscal year 2024: •Net revenue growth of low-to-mid single digit percentage. Included in the revenue outlook is a softer first half of 2024 compared to the second half of 2024. •Positive Adjusted EBITDA in the low-single digit to mid-single digit millions range.