The Honest Company has two revenue stories in the same quarter. The Honest Company reported lower revenue and higher organic revenue. WCRC explains which exits account for the difference and what to watch across categories. WCRC · Published 06/11/2026 The Honest Company's 5 November release reported third-quarter revenue of $84.6 million, down 8.6% from a year earlier. Its own organic revenue measure came to $79.3 million, up 9.2% on the comparable adjusted base. Both figures refer to the quarter ended 30 September. They compare different sets of activities. The Honest Company results and reconciliation Honest's reconciliation removes revenue from activities it has been exiting, including apparel, fulfilment through its own website and sales to Canadian retail channels. When comparing the remaining business, Honest attributed growth to wipes and personal care, partly offset by lower diaper revenue. The unadjusted number still matters because revenue from an operation disappears when the company exits it. The adjusted comparison helps explain what happened in the business management chose to keep. The Honest Company results and reconciliation Through WCRC's Powerful Brands methodology, the question is whether the narrower business earns repeat demand. A retailer could compare unit sales and repeat purchases of wipes and personal care products in the same stores. Expanding distribution can lift sales even while shoppers buy at the same rate in each store. Tracking both measures would help distinguish distribution gains from stronger performance on the shelf. WCRC Powerful Brands methodology · WCRC on distinct promises in personal care Diapers warrant their own comparison. A household can buy wipes regularly and still choose another brand's diapers. The next useful evidence is whether each category is winning more repeat purchases at the retailers Honest continues to serve. Sources. * The Honest Company results and reconciliation investors.honest.com · Primary · Accessed 06/11/2026

Honest Q3 earnings call highlights. November 6, 2026 Key points. * Organic growth and margins improved despite lower reported sales: Q3 revenue fell 8.6% to $84.6 million due to strategic business exits and weaker diaper sales, while organic revenue rose 9.2%. Adjusted gross margin increased 850 basis points to 45.8%, and underlying adjusted EBITDA margin rose 300 basis points to 7.9%. * Honest raised its 2026 outlook, including organic revenue growth of 6% to 7% and adjusted EBITDA of $25 million to $26 million. The board also authorized a new share repurchase program of up to $30 million. * Wipes and personal care are driving the product shift: Their consumption grew 13% combined, while diaper consumption declined 27%. The categories now account for more than 75% of organic revenue as Honest focuses on higher-growth, higher-margin products. * MarketBeat previews top five stocks to own in December. Honest NASDAQ: HNST raised its full-year 2026 outlook and authorized a new share repurchase program of up to $30 million after third-quarter organic revenue growth and higher margins offset a decline in reported sales. Third-quarter reported revenue fell 8.6% to $84.6 million from a year earlier, reflecting strategic business exits and lower diaper revenue. Organic revenue rose 9.2% to $79.3 million, led by wipes and personal care, Chief Financial and Operating Officer Curtiss Bruce said on the earnings call. Chief Executive Officer Carla Vernón said the two categories now account for more than 75% of organic revenue. Consumption across wipes and personal care grew 13% in the quarter, while diaper consumption declined 27%. Margins rise as product mix shifts. Reported gross margin was 45%, while adjusted gross margin improved by 850 basis points to 45.8%. Excluding dilution from apparel inventory liquidation, underlying adjusted gross margin reached a company-record 48.9%, up 1,160 basis points from the prior-year period. Bruce attributed the improvement to supply chain efficiencies, lower fulfillment costs and a favorable product mix. He said the structural improvements in supply chain and mix were "here to stay," but the company would provide more detail on future gross margin expectations in early 2027. Adjusted operating expenses rose $2.3 million to $36.5 million. Marketing spending increased $2.9 million, or 20%, to support wipes and personal care, partly offset by lower selling, general and administrative costs. Net income increased to $91.3 million from $0.8 million a year earlier. The latest result included an $89.4 million income tax benefit from the release of substantially all of the valuation allowance against deferred tax assets. Adjusted net income was $3.1 million, compared with $0.8 million a year earlier. Adjusted earnings before interest, taxes, depreciation and amortization were $6.3 million, or 7.4% of sales. Excluding apparel liquidation revenue, the underlying adjusted EBITDA margin was 7.9%, up 300 basis points year over year. Raised outlook and share repurchases. Honest increased the lower ends of its revenue and organic growth forecasts and raised its adjusted EBITDA outlook. Its updated 2026 guidance calls for: * Reported revenue of $322 million to $325 million, up from $319 million to $325 million. * Organic revenue growth of 6% to 7%, compared with its prior forecast of 5% to 7%. * Adjusted gross margin of 45.5% to 46.5%, compared with a previous forecast in the mid-40s. * Adjusted EBITDA of $25 million to $26 million, up from $23 million to $25 million. Bruce said the company plans to increase investment in selling, general and administrative expenses and marketing in the fourth quarter. The spending is intended to support the capabilities needed to scale and to build brand awareness and household penetration. Discover more MarketBeat All Access Stock Market News Stock Screener Tool Honest ended the third quarter with $103 million in cash and cash equivalents and no debt. Year-to-date free cash flow was $30.5 million. The company completed its initial $25 million share repurchase program during the quarter, and its board authorized the new program effective immediately. Bruce said reinvesting in the business remains the company's first capital allocation priority, with returning value to shareholders a secondary priority. Wipes and personal care outpace diapers. Vernón said total wipes consumption grew 15% in the quarter. Flushable wipes consumption rose nearly 170%, while sanitizing wipes grew 41% and baby wipes increased 4%. Personal care consumption rose 11%, compared with 4% growth for the comparative category. By contrast, Vernón said the decline in diaper consumption was expected and reflected in the company's plan. Honest is focusing on higher-growth, higher-margin wipes and personal care as it expands beyond households with babies. Overall consumption growth moderated to 1% in the quarter. Vernón attributed the vast majority of the change in the quarterly trend to the shift of Amazon Prime Day from the third quarter last year to the second quarter this year. Year to date, organic revenue increased nearly 7% and consumption rose 6%. Honest's household penetration was nearly 8% in the third quarter, Vernón said, with households without children accounting for more than half of its customer households. She said wipes are the most common entry point for households without children. About Honest (NASDAQ:HNST). The Honest Company, Inc is a consumer products company that develops and sells personal care, beauty, baby, and household products. Its offerings include diapers, wipes, baby care items, skin care, hair care, personal care products, and household cleaning solutions, with an emphasis on ingredient transparency and products positioned as safer and more sustainable alternatives. Founded in 2011 by actress and entrepreneur Jessica Alba, Honest sells its products through its website and retail partners. This instant news alert was generated by narrative science technology and financial data from MarketBeat in order to provide readers with the fastest reporting and unbiased coverage. Please send any questions or comments about this story to [email protected]. Before you consider Honest, you'll want to hear this. MarketBeat keeps track of Wall Street's top-rated and best performing research analysts and the stocks they recommend to their clients on a daily basis. MarketBeat has identified the five stocks that top analysts are quietly whispering to their clients to buy now before the broader market catches on... and Honest wasn't on the list. While Honest currently has a Hold rating among analysts, top-rated analysts believe these five stocks are better buys. A strong long-term portfolio starts with companies that can survive recessions, inflation, changing consumer habits, and shifting market leadership. This report names seven blue-chip stocks across technology, retail, consumer staples, healthcare, networking, sporting goods, and utilities that offer investors a mix of stability, income, growth, and staying power. Continue following MarketBeat