Honest Co. Gives Investors First Look at Performance After IPO

(Bloomberg) -- In its first earnings report since going public, Honest Co. posted sales that beat expectations, but didn’t offer any outlook on performance going forward.

• Revenue of $81 million in the first quarter was above the $79 million projected by analysts, while gross margin of 35% matched estimates.

Key Takeaways

• Honest’s report gives investors a first look at how the company is performing since going public. The company, founded by actress Jessica Alba, reported growth in two of its three business areas, with diapers and wipes -- its largest category -- being the exception. Household and wellness, which is the smallest category, posted the biggest gain.
• Diapers and wipes sales fell 2%. The company said it introduced its new “Clean Concious Diaper.”
• Honest’s performance shows that demand remains strong for products that are marketed as more natural and free of harsh chemicals. In the statement, Alba pledged to “use consumer insights” to drive sales improvements. The company sees high demand for skincare products providing a boost.

Market Reaction

• Honest shares alternated between losses and gains in post-market trading in New York. The stock, which priced at $16 in early May, have risen 10% since then.

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