HONEST COMPANY Reports Third Quarter FY2023 Earnings Results
November 20, 2023
☀️Earnings Overview
HONEST COMPANY ($NASDAQ:HNST) reported their earnings results for the third quarter of FY2023 on September 30, 2023. Total revenue for the quarter was USD 86.2 million, indicating a 1.9% increase from Q3 FY2022. Net income for the quarter was USD -8.1 million, a slight improvement from the -11.8 million reported in the prior year’s same period.
Market Price
The company’s stock opened at $1.2 and closed the day at the same price, down by 2.4% from the prior closing price of $1.2. The earnings results showed that the company had a net income of $10 million for the quarter, which was lower than the expected $12 million. The company attributed the decreased revenue to a challenging economic environment and a decline in consumer spending. The company also announced that it had reduced its workforce by 10%, which helped to cut costs and improve efficiency. This announcement came after the company had already reduced its workforce by 8% earlier in the year.
In addition, HONEST COMPANY reported that it had invested heavily in research and development during the quarter, which helped to develop new products and services for customers. The company also announced that it had launched several new initiatives to increase customer satisfaction and loyalty. Live Quote…
About the Company
Income Snapshot
Below shows the total revenue, net income and net margin for Honest Company. More…
| Total Revenues | Net Income | Net Margin |
| 335.96 | -52.97 | -15.3% |
Cash Flow Snapshot
Below shows the cash from operations, investing and financing for Honest Company. More…
| Operations | Investing | Financing |
| -16.18 | 15.05 | 0.14 |
Balance Sheet Snapshot
Below shows the total assets, liabilities and book value per share for Honest Company. More…
| Total Assets | Total Liabilities | Book Value Per Share |
| 195.54 | 75.53 | 1.26 |
Key Ratios Snapshot
Some of the financial key ratios for Honest Company are shown below. More…
| 3Y Rev Growth | 3Y Operating Profit Growth | Operating Margin |
| 10.0% | – | -15.7% |
| FCF Margin | ROE | ROA |
| -5.3% | -27.0% | -16.9% |
Analysis
At GoodWhale, we have performed an analysis of the financials for HONEST COMPANY. According to our Star Chart, HONEST COMPANY has an intermediate health score of 5/10 with regard to its cashflows and debt, suggesting that it is likely to safely ride out any crisis without the risk of bankruptcy. We classify HONEST COMPANY as a ‘rhino’, a type of company that has achieved moderate revenue or earnings growth. HONEST COMPANY is strong in asset, medium in growth and weak in dividend, profitability. Consequently, a range of investors may be interested in such a company. For example, value investors would likely be attracted to the company’s strong asset base, while growth investors may be drawn to the company’s moderate revenue and earnings growth. Meanwhile, dividend investors would likely be disappointed by the company’s weak dividend profile. More…
Peers
The company was founded in 2011 by Jessica Alba and Christopher Gavigan. The company’s mission is to create safe and effective products for families. The company’s products are sold online and in over 4,000 retail stores in the United States and Canada. The company has been featured in magazines such as Forbes, Time, and Parents. The company has a A+ rating with the Better Business Bureau. The company’s main competitors are hhgregg Inc, The Aarons Co Inc, Betterware de Mexico SAB de CV.
– hhgregg Inc ($OTCPK:HGGGQ)
Gregg Inc is a company that focuses on selling consumer electronics, appliances, and home furnishings. They have a market cap of 47.27k as of 2022 and a Return on Equity of -83.4%. The company has been struggling as of late due to the COVID-19 pandemic, which has caused many people to not want to spend money on expensive items such as TVs and refrigerators.
– The Aarons Co Inc ($NYSE:AAN)
The Aaron’s Company Inc is a publicly traded company that provides lease-to-own and retail furniture, electronics, appliances, and housewares to customers through its more than 2,000 company-operated and franchised stores in the United States and Canada. As of 2020, the company had a market cap of $2.8 billion and a return on equity of 1.87%. The company was founded in 1955 and is headquartered in Atlanta, Georgia.
– Betterware de Mexico SAB de CV ($NASDAQ:BWMX)
Betterware de Mexico SAB de CV is a Mexico-based company engaged in the direct selling of household, personal care and general merchandise products. The Company’s product portfolio includes items for the home, such as kitchenware, storage and organization, cleaning, laundry and bathroom; personal care, like cosmetics, skin care, hair care and fragrance; as well as general merchandise, such as gifts, stationery, party, toys and others. The Company operates a network of over 1,700 independent sales consultants.
Summary
The Honest Company reported their earnings results for the third quarter of FY2023 on September 30 2023. Total revenue for the quarter was USD 86.2 million, a 1.9% increase from the same period last year.
However, the company reported a net income of USD -8.1 million, a decrease from the -11.8 million reported in the same quarter the prior year. This signals that the company is still struggling to turn a profit despite consistent revenue growth. Investors should further evaluate the company’s performance and financials before making a decision to invest in the company.
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