Q2 2024 Honest Company Inc Earnings Call Transcript
Key Points
- The Honest Co Inc (HNST) achieved the highest quarterly revenue in its history with $93 million in sales, marking a 10% year-over-year increase.
- The company reported a gross margin of 38%, which represents an increase of over 1,100 basis points compared to the previous year.
- The Honest Co Inc (HNST) achieved positive adjusted EBITDA of $8 million, marking the third consecutive quarter of positive adjusted EBITDA.
- The company experienced its fifth consecutive quarter of positive cash flow, indicating strong financial health.
- The Honest brand is performing well in the baby personal care categories, with significant growth in the sensitive skin collection and expansion into major retailers like Target and Amazon.
- The diaper category is experiencing competitive pressures and overall softening trends, which could impact future growth.
- Operating expenses increased by $3 million compared to the previous year, although there was a slight improvement as a percentage of revenue.
- The company anticipates potential volatility in transportation and shipping costs, which could affect margins in the future.
- Despite strong growth, the company acknowledges macroeconomic pressures and trade-down dynamics in the consumer market.
- The gross margin of 38% achieved in Q2 is likely a high watermark, with expectations for a slight decrease in the second half of the year.
Ladies and gentlemen, thank you for standing by. Welcome to The Honest Company's second quarter 2024 earnings call. (Operator Instructions) Please be advised that today's conference is being recorded. I would now like to turn the conference over to, Ms. Elizabeth Bouquard, Senior Director, Investor Relations at The Honest Company. Please go ahead.
Good afternoon, everyone. Thank you for joining our second quarter 2024 conference call. Joining me today are Carla Vernon, our Chief Executive Officer; and Dave Loretta, our Chief Financial Officer. Before we start, I would like to remind you that we will make certain statements today that are forward-looking within the meaning of the Federal Securities Laws, including statements about the outlook of our business and other matters referenced in our earnings release issued today.
These forward-looking statements involve a number of risks and uncertainties that could cause actual results to differ materially. Please refer to our earnings release
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