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LOS ANGELES - The Honest Company (NASDAQ:HNST) reported fourth-quarter results that exceeded analyst expectations for revenue while narrowing its loss, but shares tumbled 7.6% following the announcement.
The personal care products company posted revenue of $99.84 million for the quarter, surpassing the consensus estimate of $96.34 million and marking an 11% increase YoY. The company reported a loss of $0.01 per share, beating analyst expectations for a $0.02 per share loss.
Despite the better-than-expected results, investors appeared to focus on the company’s outlook for 2025, which projects revenue growth of 4% to 6%, in line with its long-term financial algorithm but potentially slower than the 10% growth achieved in 2024.
CEO Carla Vernón commented on the results, stating, "Our Q4 and full year 2024 financial results demonstrate that our strategy, which focuses on the disciplined execution of our Transformation Pillars of Brand Maximization, Margin Enhancement and Operating Discipline, is working."
The company’s gross margin expanded significantly, reaching 38.8% in Q4, up 530 basis points from the prior year. This improvement was attributed to cost savings in transportation, fulfillment, and product costs, as well as sales volume growth.
For the full year 2024, The Honest Company reported revenue of $378 million, a 10% increase from 2023. The company also achieved its first full year of positive adjusted EBITDA as a public company, totaling $26 million.
Looking ahead, The Honest Company provided guidance for adjusted EBITDA of $27 million to $30 million for fiscal year 2025. The company ended 2024 with $75 million in cash and no debt.
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