The Honest Company (NASDAQ:HNST) has reported a small increase in its fourth-quarter revenue but a wider net loss, sending its shares 25% lower in early trade.
The digitally-native consumer products company, which was founded by actress Jessica Alba, said consumption of Honest diapers, wipes, skin, and personal care increased by 15% in the three months to December 31, 2022, from the same quarter a year earlier.
It reported revenue of $50 million for the quarter, up 2% from a year earlier. Adjusted underlying earnings (EBITDA) came in at a negative $1.6 million as its gross margin retreated to 27.5% from 30% in 4Q 2021, due to higher fulfillment and product costs. Its net loss widened to $12.6 million from a net loss of $9 million previously.
“We are not satisfied with the revenue and margin results announced today. We do not believe they reflect the strength and potential of the Honest brand,” CEO Carla Vernón said in a statement. “In 2023, we will be relentlessly focused on taking actions and defining a strategy to set us up to be a stronger, more profitable company in 2024 and beyond.”
For full year 2022, revenue decreased by 2% to $314 million due to declines in Skin and Personal Care, and Diapers and Wipes, which were partially offset by growth in Household and Wellness. Its adjusted EBITDA loss widened to $22.5 million from $3.5 million, while its net loss was $49 million compared to a net loss of $38.7 million in 2021.
The company said it expects its full-year 2023 revenue and adjusted EBITDA to be in line with its 2022 results.
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