Honest (NASDAQ:HNST) Posts Quarterly Earnings Results, Beats Expectations By $998.99 EPS

Honest (NASDAQ:HNST) issued its quarterly earnings results on Wednesday. The company reported $999.00 earnings per share (EPS) for the quarter, beating the consensus estimate of $0.01 by $998.99, reports. The company had revenue of $78.10 million for the quarter, compared to the consensus estimate of $76.25 million. Honest had a positive return on equity of 4.57% and a negative net margin of 4.22%.

Here are the key takeaways from Honest’s conference call:

• Adjusted gross margin reached a record 43.5% (up ~480 bps YoY), driven by the Powering Honest Growth mix shift and favorable freight, indicating meaningful structural margin improvement.
• Consumption accelerated to 8.3% (unit consumption +20%) and organic revenue grew 3.9%, while household penetration hit a record 8.1% (+50 bps), bringing 1.6M new households over the past year.
• Wipes and personal care led growth: total wipes consumption ~25% (flushable wipes +200%, now #4) and personal care +16% (now #2 in baby personal care), supported by targeted marketing (influencer and Toy Story activations).
• Diapers remain pressured—Q1 declines moderated to -9.6% from -18.3%—and management expects the diaper category will continue to face competitive and promotional headwinds, deprioritizing it relative to higher‑margin platforms.
• Company reaffirmed FY26 framework: reported revenue down 18%–16% (due to strategic exits) with organic growth 4%–6%, adjusted gross margins in the low 40s and adjusted EBITDA $20M–$23M; balance sheet strength includes $90.4M cash, zero debt, $3.8M FCF, and ~ $11.3M of share buybacks executed/announced.

Honest Trading Down 1.7%

Shares of Honest stock traded down $0.06 during mid-day trading on Wednesday, reaching $3.39. 2,040,536 shares of the stock were exchanged, compared to its average volume of 1,622,546. The company has a market cap of $380.80 million, a price-to-earnings ratio of -24.21 and a beta of 2.15. The firm has a 50-day simple moving average of $2.98 and a 200 day simple moving average of $2.80. Honest has a fifty-two week low of $2.07 and a fifty-two week high of $5.55.

Wall Street Analyst Weigh In

Several equities research analysts recently weighed in on the stock. Morgan Stanley set a $3.00 target price on shares of Honest in a research note on Wednesday, March 4th. Wall Street Zen cut shares of Honest from a “hold” rating to a “sell” rating in a research note on Saturday, April 4th. JPMorgan Chase & Co. reiterated an “underweight” rating on shares of Honest in a research note on Friday, January 16th. Telsey Advisory Group reiterated a “market perform” rating and issued a $3.00 target price on shares of Honest in a research note on Thursday, February 26th. Finally, Weiss Ratings reiterated a “sell (d+)” rating on shares of Honest in a research note on Thursday, January 22nd. One analyst has rated the stock with a Buy rating, four have assigned a Hold rating and two have given a Sell rating to the company. According to data from MarketBeat.com, Honest has a consensus rating of “Reduce” and an average target price of $3.00.

Insider Activity at Honest

In other news, SVP Jonathan Mayle sold 12,725 shares of Honest stock in a transaction that occurred on Thursday, March 5th. The shares were sold at an average price of $2.85, for a total value of $36,266.25. Following the completion of the transaction, the senior vice president owned 455,391 shares in the company, valued at approximately $1,297,864.35. The trade was a 2.72% decrease in their ownership of the stock. The transaction was disclosed in a legal filing with the SEC, which is accessible through this link. Also, General Counsel Brendan Sheehey sold 22,556 shares of Honest stock in a transaction that occurred on Thursday, March 5th. The shares were sold at an average price of $2.85, for a total transaction of $64,284.60. Following the completion of the transaction, the general counsel owned 725,672 shares of the company’s stock, valued at $2,068,165.20. This trade represents a 3.01% decrease in their position. The disclosure for this sale is available in the SEC filing. In the last quarter, insiders have sold 191,894 shares of company stock valued at $546,898. Insiders own 9.40% of the company’s stock.

Institutional Inflows and Outflows

Institutional investors have recently modified their holdings of the company. Caitong International Asset Management Co. Ltd raised its stake in shares of Honest by 1,392.2% in the third quarter. Caitong International Asset Management Co. Ltd now owns 7,073 shares of the company’s stock valued at $26,000 after acquiring an additional 6,599 shares during the last quarter. Equity Wealth Partners LLC bought a new position in shares of Honest in the third quarter valued at approximately $37,000. CIBC Bancorp USA Inc. bought a new position in shares of Honest in the third quarter valued at approximately $39,000. Northwestern Mutual Wealth Management Co. raised its stake in shares of Honest by 85,544.4% in the third quarter. Northwestern Mutual Wealth Management Co. now owns 15,416 shares of the company’s stock valued at $57,000 after acquiring an additional 15,398 shares during the last quarter. Finally, Abel Hall LLC bought a new position in shares of Honest in the fourth quarter valued at approximately $60,000. Institutional investors own 45.54% of the company’s stock.

Honest announced that its Board of Directors has initiated a share repurchase program on Friday, February 20th that permits the company to buyback $25.00 million in shares. This buyback authorization permits the company to buy up to 9.9% of its stock through open market purchases. Stock buyback programs are generally a sign that the company’s leadership believes its stock is undervalued.

About Honest

The Honest Company, Inc (NASDAQ: HNST) is an American consumer goods firm specializing in eco-friendly and responsibly formulated products for babies, personal care, beauty and home cleaning. The company emphasizes transparency in ingredient sourcing and product safety, positioning itself in the premium segment of mass-market retail and direct-to-consumer channels.

Honest was founded in 2011 by actress Jessica Alba and environmental health advocate Christopher Gavigan with a mission to offer parents household and baby care items free from harsh chemicals and synthetic fragrances.