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Honest Company Q3 revenue beats estimates as wipes and personal care products grow

By Reuters News


Overview

  • US personal care products maker's Q3 revenue fell 8.6% but beat analyst expectations

  • Q3 adjusted EBITDA beat analyst estimates

  • Company announced new $30 mln share repurchase program and raised full-year 2026 outlook


Outlook

  • Honest Co raises 2026 revenue outlook to $322 mln-$325 mln from $319 mln-$325 mln

  • Company now expects 2026 organic revenue growth of 6%-7%, up from 5%-7%

  • Honest Co sees 2026 adjusted EBITDA of $25 mln-$26 mln, up from $23 mln-$25 mln


Result Drivers

  • PRODUCT MIX SHIFT - Growth in wipes and personal care products, partially offset by a decline in diaper revenue, drove organic revenue increase, per company

  • STRATEGIC EXITS - Revenue decline attributed to strategic exits under Powering Honest Growth and diaper revenue declines, per company

  • MARGIN IMPROVEMENT - Gross margin expansion primarily driven by favorable supply chain rates, product mix, and improvements related to strategic exits, per company


Company press release:


Key Details

Metric

Beat/Miss

Actual

Consensus Estimate

Q3 Revenue

Beat

$84.61 mln

$80.79 mln (6 Analysts)

Q3 Net Income

$91.32 mln

Q3 Adjusted EBITDA

Beat

$6.3 mln

$2.56 mln (6 Analysts)

Q3 Gross Margin

45.00%


Analyst Coverage

  • The current average analyst rating on the shares is "hold" and the breakdown of recommendations is 4 "strong buy" or "buy", 2 "hold" and 1 "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 The Honest Company, Inc. is $5.00, about 12.6% above its November 4 closing price of $4.44

  • The stock recently traded at 38 times the next 12-month earnings vs. a P/E of 43 three months ago


Reuters Recommended Reads

  • Nov 5 - Vegan protein maker Beyond Meat Q3 revenue falls on drop in sales volume

  • Nov 4 - elf Beauty Q2 net sales jump 51%, surpassing estimates on strong retailer, e-commerce channels

  • Nov 4 - SharkNinja Q3 revenue beats expectations on espresso machine sales


For questions concerning the data in this report, contact Estimates.Support@lseg.com. For any other questions or feedback, contact reuters.support@thomsonreuters.com.


(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.)

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