Shares of consumer goods company Honest Company Inc HNST are rising after it reported 10.3% growth in fourth quarter 2023 sales to $90.26 million, beating the analyst consensus of $84.14 million.
The increase in revenue was driven by growth in the Digital channel, volume growth, and the benefit of price gains.
Diapers and Wipes revenue increased 15% Y/Y to $57.3 million, Skin & Personal Care fell 6% to $21.4 million, and Household & Wellness grew 28% to $11.6 million.
Digital revenue jumped 28% Y/Y to $45.4 million, and Retail revenue declined 3% to $44.9 million. EPS of $0.01 beat the analyst consensus of $(0.08).
The gross margin for the quarter expanded by 600 basis points to 33.5%. The operating income for the quarter was $1.1 million versus a loss of $(12.8) million last year.
The company held $32.8 million in cash and equivalents as of December 31, 2023.
“Our fourth quarter results demonstrate the benefit that our Transformation Initiative has had on the business. Our clear focus on Brand Maximization, Margin Enhancement, and Operating Discipline has enabled us to achieve both positive Net Income and positive Adjusted EBITDA,” said CEO Carla Vernón.
Outlook: Honest Company sees FY24 revenue growth of low-to-mid single-digit percentage. Meanwhile, the company expects a softer first half of 2024 compared to the second half of 2024.
The company expects adjusted EBITDA to be in the low-single digit to mid-single digit millions range.
Price Action: HNST shares traded higher by 32.7% at $4.18 in premarket on the last check Thursday.
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