The Honest Company Sales Fall 8.6% as Tax Benefit Lifts Profit

Wipes and personal care grew, helping organic revenue increase 9.2%, according to the company’s November 5 earnings release. Organic revenue is a company-defined non-GAAP measure. Tax benefit drives reported profit Gross margin increased to 45%.

Net income of $91.3 million included an $89.4 million tax benefit, primarily from releasing a valuation allowance against deferred tax assets. Underlying adjusted net income was $3.1 million, distinguishing operating progress from the large accounting benefit.

Outlook and repurchases Honest now projects annual revenue of $322 million to $325 million and adjusted EBITDA of $25 million to $26 million. Its board also authorized up to $30 million in share repurchases. The authorization does not require purchases and has no expiration date. Figures are in U.S. dollars.

Underlying adjusted net income and adjusted EBITDA are non-GAAP measures.