The Honest Company Inc. (NASDAQ:HNST) shares are trending on Thursday.
Check out the current price of HNST stock here.
Shares of the California-based personal care company fell 15.46% in after-hours trading on Wednesday to $2.79 after the release of its third-quarter results and updated full-year outlook.
Q3 Revenue Declines 6.7%
For the three months ending September 30,The Honest Company reported $93 million in revenue, a 6.7% decrease from the same period last year.
Organic revenue of the company decreased 4.7% to $73 million compared to $76 million.
The drop in revenue was mainly due to lower retail and Honest.com sales as the company moves away from using Honest.com as a fulfillment channel. Retail revenue declined because of weaker diaper and baby apparel sales, partly offset by higher wipes sales.
Gross margin decreased 140 basis points to 37.3% from 38.7%, primarily due to declined sales volume and increased tariff costs.
Net income was $758,000 compared to $165,000 in the prior year period.
For the eighth consecutive quarter, adjusted earnings before interest, tax, depreciation, and amortisation (EBITDA) was positive, coming in at $3.52 million as opposed to $7.07 million.
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Transformation 2.0 Plan Announced
The Honest Company also announced the launch of Transformation 2.0: Powering Honest Growth, approved by the board of directors on Oct. 30. The program includes closing some non-strategic, lower margin categories and channels, such as apparel and fulfillment on Honest.com, as well as Canadian retail and online stores.
Carla Vernón, CEO of the company, said, "While third-quarter revenue was softer than anticipated, our team's disciplined execution delivered profitability improvement resulting in positive net income. We believe these actions will reduce complexity, drive sharper focus on our core product categories and strengthen our profitability."
Stock Performance
The stock of the consumer goods company is down 51.4% year to date.
With a market capitalization of $367.19 million, the company's shares have traded in a 52-week range of $3.25 to $8.97.
Price Action: According to Benzinga Pro data, HNST closed Wednesday’s regular session at $3.30.
Benzinga’s Edge Stock Rankings highlight HNST has a Growth score of 91.65. Track the performance of other players in this segment.
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