The Honest Company ( NASDAQ: HNST ) shares slipped in Friday’s premarket trading as second quarter losses came in slightly wider than analysts had anticipated.
The company founded by Jessica Alba posted an EPS loss just once cent larger than expected, while revenue notched a narrow beat on estimates. Margins contracted 600 basis points from the prior year as freight and raw material costs increased significantly. The company noted that it has instituted price increases in order to offset these impacts and expects the metric to improve in coming quarters.
“Given cost pressures that continue to impact the industry and Honest, we have put plans in place to mitigate the impact of inflation, including pricing, margin-accretive innovation, and cost savings, which we’re confident will drive long-term gross margin improvement,” CEO Nick Vlahos said. “Our 2022 outlook continues to expect sequential Adjusted EBITDA improvement over the back half of the year, and positive Adjusted EBITDA in the fourth quarter.”
Vlahos reaffirmed the full-year revenue outlook, which is expected to be approximately flat compared to 2021. Still, full year adjusted EBITDA outlook is now expected to be a loss in the range of negative $10M to negative $20M.
Shares fell 1.04% in premarket trading on Friday.
Read more on the details of the results .
For further details see:
Honest Company sees losses widen as cost pressures mount