Overview

* Honest Company ( HNST ) Q3 revenue misses analyst expectations, declining 6.7% yr/yr

* Adjusted EBITDA for Q3 beats analyst expectations, reflecting operational efficiency

* Company launches Transformation 2.0, exiting lower margin categories to enhance profitability

Outlook

* Company updates full-year 2025 revenue outlook to range from -3% to flat

* Company expects full-year 2025 adjusted EBITDA of $21 to $23 mln

* Company projects full-year 2025 organic revenue growth of 4-6%

Result Drivers

* TRANSFORMATION 2.0 - Launch of program to exit lower margin categories and optimize cost structure to enhance profitability

* REVENUE DECLINE - Revenue decreased due to strategic exits from Honest.com fulfillment and apparel, affecting retail revenue

* NET INCOME IMPROVEMENT - Positive net income achieved through disciplined execution and operational efficiency, per CEO Carla Vernón

Key Details

Metric Beat/Mis Actual Consensu

s s

Estimate

Q3 Miss $92.57 $99.40

Revenue mln mln (6

Analysts

)

Q3 Net $758,000

Income

Q3 Beat $3.52 $2.53

Adjusted mln mln (4

EBITDA Analysts

)

Q3 Gross 37.3%

Margin

Analyst Coverage

* The current average analyst rating on the shares is "buy" and the breakdown of recommendations is 5 "strong buy" or "buy", 2 "hold" and no "sell" or "strong sell"

* The average consensus recommendation for the miscellaneous specialty retailers peer group is "buy"

* Wall Street's median 12-month price target for Honest Company Inc ( HNST ) is $7.25, about 54.1% above its November 4 closing price of $3.33

* The stock recently traded at 33 times the next 12-month earnings vs. a P/E of 51 three months ago

Press Release:

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(This story was created using Reuters automation and AI based on LSEG and company data. It was checked and edited by a Reuters journalist prior to publication.)