The Honest Company Reports Second Quarter 2026 Results; Top-Line Momentum Continues Behind Higher-Margin Growth Platforms

About this update from The Honest Company, Inc.

LOS ANGELES -- The Honest Company (Nasdaq: HNST), a personal care company dedicated to creating cleanly-formulated and sustainably-designed products for everyone from babies to adults, today reported financial results for its second quarter ended June 30, 2026 . Second Quarter 2026 Financial Highlights Compared to Prior Year Period: * Revenue of $83.3 million decreased 10.9%; Organic Revenue(1) increased 6.7% * Gross margin of 48.4% increased 800 bps; Underlying Adjusted Gross Margin(1) of 43.8% increased 340 bps * Net income of $10.7 million increased $6.8 million ; Underlying Adjusted Net Income(1) was $5.1 million * Underlying Adjusted EBITDA(1) was $7.8 million ; Underlying Adjusted EBITDA Margin(1) of 9.8% increased 160 bps * Cash and cash equivalents of $105.9 million increased $33.8 million 'For the second quarter we delivered accelerated Organic Revenue growth of 7% and record underlying margins,' said Chief Executive Officer, Carla Vernon . 'With consumption growth of nearly 8%, we believe the momentum across our fastest-growing, most profitable platforms is proving to be durable. This strong performance, built upon a vibrant growth vision and increased structural profitability, is evidence that The Honest Company is a modern personal care company built to last. We are now well-positioned to thoughtfully deploy additional investments to expand household penetration and drive operational excellence of The Honest Company . With confidence in our continued momentum, we are raising our full-year 2026 financial outlook.' Second Quarter Results https://investors.honest.com/news-releases/news-release-details/honest-company-reports-second-quarter-2026-results (1) These are non-GAAP financial measures. See tables below under 'Use of Non-GAAP Financial Measures' for information on how we calculate and define these non-GAAP financial measures, including a reconciliation of these non-GAAP financial measures to the most comparable GAAP financial measures. Revenue decreased 10.9% to $83.3 million , reflecting the impact of strategic exits under Powering Honest Growth and diaper revenue declines, partially offset by continued growth in wipes and personal care products. Organic Revenue(1) increased 6.7% to $80.2 million , driven by growth in wipes and personal care products, partially offset by a decline in diaper revenue. Tracked channel consumption(2) for the Company increased 7.7% versus 2.3% for the comparative categories in the same period. Gross margin was 48.4%, reflecting an increase of 800 bps. This expansion was primarily driven by tariff refunds, favorable product mix, and improvements related to strategic exits under Powering Honest Growth(3) net of the partial liquidation of the remaining apparel inventory. Adjusted Gross Margin(1), calculated by excluding the discrete costs of Powering Honest Growth, was 50.1%, reflecting an increase of 970 bps. Underlying Adjusted Gross Margin(1), calculated by excluding the discrete costs of Powering Honest Growth, tariff refunds and the partial liquidation of the remaining apparel inventory was 43.8%. Operating expenses decreased $4.1 million to $30.8 million . The decrease in operating expenses was driven by lower selling, general & administrative expenses, partially offset by increased marketing investment to support our higher-growth, higher-margin wipes and personal care platforms. Adjusted Operating Expenses(1), calculated by excluding the discrete costs of Powering Honest Growth, was $31.2 million . Selling, general & administrative expenses as a percentage of revenue decreased approximately 380 bps mainly driven by operational efficiencies. Net income increased $6.8 million to $10.7 million primarily related to tariff refunds and growth in Organic Revenue(1). Adjusted Net Income(1) excluding the impact of Powering Honest Growth was $11.7 million . Underlying Adjusted Net Income(1), calculated as Adjusted Net Income excluding tariff refunds was $5.1 million . Adjusted EBITDA(1) was $14.5 million compared to $7.6 million . Underlying Adjusted EBITDA(1), calculated as Adjusted EBITDA excluding tariff refunds was $7.8 million and Underlying Adjusted EBITDA Margin(1) was 9.8%. Balance Sheet and Cash Flow As of June 30, 2026 , the Company had no debt outstanding and $105.9 million in cash and cash equivalents, an increase of $33.8 million , primarily related to inventory reductions and higher net income, partially offset by repurchases of common stock versus the prior year period. Net cash provided by operating activities was $37.8 million for the six months ended June 30, 2026 , compared to net cash used in operating activities of $3.7 million in the prior year period. During the six months ended June 30, 2026 , the Company repurchased approximately 5.6 million shares of its common stock for approximately $18.7 million at a weighted average price of $3.35 per share. As of June 30, 2026 , the Company had approximately $6.3 million remaining under its share repurchase program. (1) These are non-GAAP financial measures. See tables below under 'Use of Non-GAAP Financial Measures' for information on how we calculate and define these non-GAAP financial measures, including a reconciliation of these non-GAAP financial measures to the most comparable GAAP financial measures. (2) According to Circana, Inc. MULO+ tracked channel consumption data. Reflects consumption in the categories in which the Company competes. Weighted category growth represents retail consumption growth of the categories in which the Company competes, weighted by the Company's category growth for the latest 13 weeks ended June 28, 2026 . (3) Refer to the table below under 'Transformation 2.0: Powering Honest Growth' for additional information on costs incurred in connection with Powering Honest Growth for the six months ended June 30, 2026 . Raising Full Year 2026 Financial Outlook The Company is raising its full year 2026 financial outlook for Revenue, Organic Revenue growth, Adjusted Gross Margin and Adjusted EBITDA. See full release at: https://investors.honest.com/news-releases/news-release-details/honest-company-reports-second-quarter-2026-results (C) 2026 Electronic News Publishing, source ENP Newswire

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