Personal care company The Honest Company (NASDAQ:HNST) announced better-than-expected revenue in Q2 CY2025, but sales were flat year on year at $93.46 million. Its GAAP profit of $0.03 per share was $0.02 above analysts’ consensus estimates.
Is now the time to buy The Honest Company? Find out in our full research report.
Revenue: $93.46 million vs analyst estimates of $92.12 million (flat year on year, 1.5% beat)
EPS (GAAP): $0.03 vs analyst estimates of $0.01 ($0.02 beat)
Adjusted EBITDA: $7.62 million vs analyst estimates of $6.64 million (8.2% margin, 14.7% beat)
EBITDA guidance for the full year is $28.5 million at the midpoint, below analyst estimates of $28.83 million
Operating Margin: 3.1%, up from -4.3% in the same quarter last year
Free Cash Flow was -$826,000, down from $2.93 million in the same quarter last year
Market Capitalization: $498.3 million
“For our second quarter 2025, we were able to drive profitability improvement, gross margin expansion and revenue growth, resulting in positive net income for the second consecutive quarter,” said Chief Executive Officer, Carla Vernón.
Co-founded by actress Jessica Alba, The Honest Company (NASDAQ:HNST) sells diapers and wipes, skin care products, and household cleaning products.
A company’s long-term sales performance can indicate its overall quality. Even a bad business can shine for one or two quarters, but a top-tier one grows for years.
With $389.8 million in revenue over the past 12 months, The Honest Company is a small consumer staples company, which sometimes brings disadvantages compared to larger competitors benefiting from economies of scale and negotiating leverage with retailers. On the bright side, it can grow faster because it has a longer list of untapped store chains to sell into.
As you can see below, The Honest Company’s 7.9% annualized revenue growth over the last three years was decent. This shows its offerings generated slightly more demand than the average consumer staples company, a useful starting point for our analysis.
This quarter, The Honest Company’s $93.46 million of revenue was flat year on year but beat Wall Street’s estimates by 1.5%.
Looking ahead, sell-side analysts expect revenue to grow 4.7% over the next 12 months, a deceleration versus the last three years. This projection doesn’t excite us and indicates its products will see some demand headwinds.
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