Banking

Jessica Alba’s Honest Company Beats Views In First Earnings Since IPO

The Honest Company (HNST), the recent IPO founded by actress Jessica Alba, topped fiscal first-quarter estimates after the close. Honest Company stock rose.




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The report from the company — which sells diapers, wipes, cleaning products and beauty and personal-care items — is the first since its trading debut last month.

Honest Company Earnings

Estimates: Wall Street expects The Honest Company to lose 6 cents per share, according to FactSet. Revenue was expected to come in at $79.3 million.

Results: Loss of 5 cents a share as revenue rose 12% to $81 million. But sales of diapers and wipes, the biggest segment dipped 2% to $49.6 million. Management attributed the drop to the transition to the Clean Conscious Diaper as tough year-ago comps that saw pandemic-related stockpiling.

Skin and personal care sales jumped 42% to $26.2 million. Household and wellness sales surged 53% to $5.2 million.

Digital channel revenue increased 2% to $42.5 million.

Honest Company Stock

The Honest Company stock edged up 0.2% late after closing down 3.45% at 17.65 in the stock market today, forming an IPO base with a buy point of 23.98. Shares have a Composite Rating of 31. Their EPS Rating is 16.

Honest Company stock began trading on May 5. Alba founded the company in an effort to make wellness products more transparent. Honest has also said it hopes to attract a population focused more deeply on health after the coronavirus pandemic shut down daily life last year.

In recent years, however, recalls and lawsuits have raised questions about claims in Honest’s products.

Still, some analysts who cover Honest Company stock like the company’s prospects. William Blair analysts this month said Honest was already popular, but still had room to grow in a multibillion-dollar market. They also praised its balanced mix of digital and brick-and-mortar sales.

“Moreover, The Honest Company consumer has a 14% higher average basket size (in dollars) than the average Target (TGT) consumer, making the company’s consumers attractive to retailers,” they said.

However, they noted that some of Honest’s rivals — such as Procter & Gamble (PG) — have deep pockets. And its beauty business, they said, faces risks around rapidly-changing trends.

Along with Honest Company stock, Procter & Gamble slipped 1.4% on Wednesday to 132.79. The stock is in a cup-with-handle base with a 139.20 buy point.

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