Honest (NASDAQ:HNST) Releases Quarterly Earnings Results, Beats Estimates By $998.99 EPS

Key Points

• Shock EPS beat: Honest reported Q results showing $999.00 EPS, topping the $0.01 consensus by $998.99, with revenue of $78.1 million versus $76.25 million expected.
• Margin and strategy shift: Adjusted gross margin hit a record 43.5% (up ~480 bps) as wipes and personal care drove consumption and household penetration gains, but diapers remain pressured; the company reaffirmed its FY26 framework, holds $90.4M cash with zero debt, and authorized a $25M share buyback.

Honest (NASDAQ:HNST - Get Free Report) announced its quarterly earnings results on Wednesday. The company reported $999.00 earnings per share (EPS) for the quarter, topping the consensus estimate of $0.01 by $998.99, reports. The business had revenue of $78.10 million during 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 Stock Down 1.7%

NASDAQ HNST traded down $0.06 during trading hours on Wednesday, reaching $3.39. 2,040,536 shares of the company were exchanged, compared to its average volume of 1,622,546. The stock has a market capitalization of $380.80 million, a P/E ratio of -24.21 and a beta of 2.15. Honest has a 1 year low of $2.07 and a 1 year high of $5.55. The business's 50 day simple moving average is $2.98 and its 200-day simple moving average is $2.80.

Insider Transactions at Honest

In other news, General Counsel Brendan Sheehey sold 22,556 shares of the firm's 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 sale, the general counsel owned 725,672 shares in the company, valued at $2,068,165.20. This trade represents a 3.01% decrease in their position. The sale was disclosed in a document filed with the SEC, which is available at this hyperlink. Also, SVP Kunssberg Etienne Von sold 12,179 shares of Honest stock in a transaction that occurred on Thursday, March 5th. The stock was sold at an average price of $2.85, for a total transaction of $34,710.15. Following the completion of the sale, the senior vice president directly owned 308,710 shares in the company, valued at $879,823.50. This trade represents a 3.80% decrease in their position. The SEC filing for this sale provides additional information. Over the last quarter, insiders sold 191,894 shares of company stock valued at $546,898. Corporate insiders own 9.40% of the company's stock.

Institutional Trading of Honest

Several hedge funds have recently made changes to their positions in HNST. Mak Capital One LLC bought a new position in shares of Honest during the 4th quarter worth $9,104,000. Balyasny Asset Management L.P. increased its holdings in Honest by 796.2% in the 4th quarter. Balyasny Asset Management L.P. now owns 2,006,646 shares of the company's stock worth $5,177,000 after acquiring an additional 1,782,742 shares during the last quarter. Goldman Sachs Group Inc. raised its stake in Honest by 70.3% in the 4th quarter. Goldman Sachs Group Inc. now owns 1,520,331 shares of the company's stock valued at $3,922,000 after acquiring an additional 627,537 shares during the period. Bank of America Corp DE lifted its holdings in Honest by 187.8% during the second quarter. Bank of America Corp DE now owns 542,269 shares of the company's stock valued at $2,760,000 after purchasing an additional 353,858 shares during the last quarter. Finally, Ameriprise Financial Inc. lifted its holdings in Honest by 39.9% during the third quarter. Ameriprise Financial Inc. now owns 1,231,180 shares of the company's stock valued at $4,531,000 after purchasing an additional 350,860 shares during the last quarter. 45.54% of the stock is currently owned by institutional investors.

Honest declared that its board has authorized a stock buyback plan on Friday, February 20th that authorizes the company to buyback $25.00 million in shares. This buyback authorization authorizes the company to reacquire up to 9.9% of its stock through open market purchases. Stock buyback plans are typically an indication that the company's board believes its shares are undervalued.

Analyst Ratings Changes

A number of equities analysts have issued reports on HNST shares. Zacks Research raised shares of Honest from a "strong sell" rating to a "hold" rating in a report on Thursday, March 26th. JPMorgan Chase & Co. reiterated an "underweight" rating on shares of Honest in a report on Friday, January 16th. Wall Street Zen lowered shares of Honest from a "hold" rating to a "sell" rating in a research report on Saturday, April 4th. Telsey Advisory Group reaffirmed a "market perform" rating and issued a $3.00 price objective on shares of Honest in a research report 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 equities research analyst has rated the stock with a Buy rating, four have given a Hold rating and two have given a Sell rating to the company. According to data from MarketBeat.com, Honest has an average rating of "Reduce" and an average target price of $3.00.

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.

This instant news alert was generated by narrative science technology and financial data from MarketBeat in order to provide readers with the fastest reporting and unbiased coverage. Please send any questions or comments about this story to contact@marketbeat.com.