Revenue growth remains under pressure with a 19.7% contraction in 2026Q1, while gross margins exhibit extreme volatility, fluctuating between 15.7% and 42.6% over the last two quarters.
| Sales/Revenue | 352.17M | 371.32M | 378.34M | 344.37M | 313.65M | 318.64M | 300.52M | 235.59M |
| Revenue Growth % | -9.56% | -1.86% | 9.87% | 9.79% | -1.57% | 6.03% | 27.56% | - |
| Cost of Goods Sold | 232.81M | 247.56M | 233.68M | 243.83M | 221.34M | 209.47M | 192.63M | 159.73M |
| COGS % of Revenue | - | 66.67% | 61.77% | 70.81% | 70.57% | 65.74% | 64.1% | 67.8% |
| Gross Profit | 119.36M | 123.75M | 144.66M | 100.53M | 92.31M | 109.17M | 107.9M | 75.85M |
| Gross Margin % | 33.89% | 33.33% | 38.23% | 29.19% | 29.43% | 34.26% | 35.9% | 32.2% |
| Gross Profit Growth % | - | -14.45% | 43.89% | 8.9% | -15.44% | 1.18% | 42.24% | - |
| Operating Expenses | 136.82M | 142.22M | 150.99M | 139.44M | 142.09M | 146M | 121.44M | 107.31M |
| OpEx % of Revenue | - | 38.3% | 39.91% | 40.49% | 45.3% | 45.82% | 40.41% | 45.55% |
| Selling, General & Admin | 114.87M | 130.71M | 144.14M | 131.02M | 135.1M | 138.32M | 115.73M | 102.17M |
| SG&A % of Revenue | - | 35.2% | 38.1% | 38.05% | 43.07% | 43.41% | 38.51% | 43.37% |
| Research & Development | 7.36M | 7.35M | 6.85M | 6.21M | 7M | 7.68M | 5.71M | 5.14M |
| R&D % of Revenue | - | 1.98% | 1.81% | 1.8% | 2.23% | 2.41% | 1.9% | 2.18% |
| Other Operating Expenses | 1000K | 4.16M | 0 | 2.21M | 0 | 0 | 0 | 0 |
| Operating Income | -17.47M | -18.46M | -6.33M | -38.91M | -49.78M | -36.83M | -13.54M | -31.46M |
| Operating Margin % | -4.96% | -4.97% | -1.67% | -11.3% | -15.87% | -11.56% | -4.51% | -13.35% |
| Operating Income Growth % | - | -191.6% | 83.73% | 21.84% | -35.18% | -171.98% | 56.96% | - |
| EBITDA | -10.28M | -8.91M | 2.96M | -36.17M | -40.85M | -32.68M | -8.69M | -23.79M |
| EBITDA Margin % | -2.92% | -2.4% | 0.78% | -10.5% | -13.02% | -10.26% | -2.89% | -10.1% |
| EBITDA Growth % | -233.25% | -401.45% | 108.17% | 11.45% | -24.99% | -276.24% | 63.48% | - |
| D&A (Non-Cash Add-back) | 7.19M | 9.55M | 9.29M | 2.74M | 8.93M | 4.15M | 4.85M | 7.67M |
| EBIT | -17.47M | -12.5M | -6.33M | -38.89M | -49.78M | -36.83M | -13.54M | -31.46M |
| Net Interest Income | -70K | -2.98M | 508K | -269K | 494K | -1.75M | -837K | 0 |
| Interest Income | 593K | 0 | 508K | 0 | 494K | 0 | 0 | 0 |
| Interest Expense | 663K | 2.98M | 0 | 269K | 0 | 1.75M | 837K | 0 |
| Other Income/Expense | -1.31M | 2.98M | 282K | -254K | 871K | -1.78M | -837K | 429K |
| Pretax Income | -18.77M | -15.48M | -6.05M | -39.16M | -48.91M | -38.6M | -14.38M | -31.03M |
| Pretax Margin % | -5.33% | -4.17% | -1.6% | -11.37% | -15.59% | -12.11% | -4.78% | -13.17% |
| Income Tax | 209K | 204K | 75K | 75K | 110K | 77K | 89K | 55K |
| Effective Tax Rate % | -1.11% | -1.32% | -1.24% | -0.19% | -0.22% | -0.2% | -0.62% | -0.18% |
| Net Income | -18.98M | -15.69M | -6.12M | -39.24M | -49.02M | -38.68M | -14.47M | -31.08M |
| Net Margin % | -5.39% | -4.22% | -1.62% | -11.39% | -15.63% | -12.14% | -4.81% | -13.19% |
| Net Income Growth % | -1193.12% | -156.14% | 84.39% | 19.95% | -26.73% | -167.38% | 53.46% | - |
| Net Income (Continuing) | -18.98M | -15.69M | -6.12M | -39.24M | -49.02M | -38.68M | -14.47M | -31.08M |
| Discontinued Operations | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| Minority Interest | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| EPS (Diluted) | -0.17 | -0.14 | -0.06 | -0.42 | -0.53 | -0.54 | -0.16 | -0.34 |
| EPS Growth % | -887.21% | -129.13% | 85.45% | 20.75% | 1.85% | -237.5% | 52.94% | - |
| EPS (Basic) | - | -0.14 | -0.06 | -0.42 | -0.53 | -0.54 | -0.16 | -0.34 |
| Diluted Shares Outstanding | 112.82M | 111.21M | 100.25M | 94.52M | 92.2M | 71.13M | 90.19M | 90.19M |
| Basic Shares Outstanding | 112.82M | 111.21M | 100.25M | 94.52M | 92.2M | 71.13M | 90.19M | 90.19M |
| Dividend Payout Ratio | - | - | - | - | - | - | - | - |
Persistent Revenue Contraction
As indicated by the most recent quarterly data, The Honest Company experienced a significant revenue contraction of 19.7% year-over-year in 2026Q1, marking a sharp reversal from the modest growth observed in early 2025 and highlighting potential saturation within its core consumer demographic.
The rapid deceleration in top-line performance suggests that the brand's premium positioning may be struggling against increased price sensitivity and competitive pressure from private-label alternatives. Investors should monitor whether this decline reflects a permanent loss of market share or merely a temporary adjustment in retail inventory replenishment cycles.
Based on reported financial statements, the company's gross margin profile has demonstrated extreme instability, swinging from a low of 15.7% in 2025Q4 to 42.6% in 2026Q1, which suggests significant exposure to input cost fluctuations and potential inventory write-downs that complicate long-term margin forecasting.
The wide variance in gross profitability indicates that the company lacks the pricing power necessary to consistently pass through raw material cost increases to the end consumer. This structural inconsistency makes it difficult to establish a reliable baseline for operating performance and warrants further investigation into the company's supply chain management.
According to historical income statement data, the company has failed to demonstrate meaningful operating leverage, as SG&A expenses frequently outpace gross profit growth, resulting in inconsistent operating margins that dipped to -22.7% as recently as 2025Q4.
The inability to scale operating income alongside revenue suggests that the current cost structure is heavily weighted toward fixed marketing and administrative overhead. Without a clear path to reducing these expenses relative to sales, the company may continue to struggle with achieving sustainable bottom-line profitability.
While the company maintains a niche in the wellness space, the recent 19.7% revenue decline in 2026Q1 raises concerns that the 'clean-label' premium is insufficient to defend against trade-down risks in a tightening consumer environment, potentially challenging the long-term viability of its current business model.
Short-sellers may focus on the company's inability to maintain positive operating margins despite its established brand presence. The reliance on high-cost customer acquisition in a competitive retail landscape suggests that the company's growth may be more expensive than the current valuation implies.
Quick answers to the most common questions about buying HNST stock.
For fiscal year 2025, The Honest Company, Inc. (HNST) reported total revenue of $371.3M. This represents a 57.6% increase compared to $235.6M in 2019.
The Honest Company, Inc. (HNST) reported a net loss of $15.7M for the fiscal year ending 2025.
The Honest Company, Inc. (HNST) reported an operating income of $-18.5M, resulting in an operating profit margin of -5.0%. This margin reflects the operational efficiency of the business before interest and taxes.
The Honest Company, Inc. (HNST) generated $123.8M in gross profit for the year, representing a gross profit margin of 33.3%. This demonstrates the company's core pricing power and production efficiency.