Earnings

Honest Company Raises 2026 Outlook Again After Organic Growth

The Tip Desk · November 11, 2026 · 3 min read

Organic revenue rose 9.2% to $79.3 million in the third quarter as the company lifted full-year revenue to $322 million–$325 million.

The Honest Company (HNST), a personal care maker of cleanly formulated products for babies through adults, reported organic revenue growth of 9.2% in the third quarter ended September 30, 2026, accelerating from 6.7% in the second quarter and 3.9% in the first quarter.

Organic revenue, which excludes apparel, Honest.com fulfillment-center sales and Canadian retail channels exited under Powering Honest Growth, was $79.3 million. Reported revenue was $84.6 million, down 8.6% from a year earlier, a shallower decline than the 10.9% drop in the second quarter. The company said the top-line decrease reflected strategic exits and diaper revenue declines, partially offset by growth in wipes and personal care products.

Tracked channel consumption for the company increased 1.3% in the 13 weeks ended September 27, 2026, compared with 2.1% growth for the comparative categories. Consumption of the higher-growth, higher-margin wipes and personal care platforms rose 13.2% in aggregate, four times the 3.3% growth of those categories.

GAAP gross margin was 45.0%, up 770 basis points from a year earlier. The company said the expansion was primarily driven by favorable supply chain rates, favorable product mix, and improvements related to strategic exits, net of a partial liquidation of remaining apparel inventory and restructuring expenses. Underlying Adjusted Gross Margin, which also excludes the apparel liquidation, reached a record 48.9%. Apparel revenue was $5.3 million; Honest.com fulfillment-center and Canada revenue were zero.

Operating expenses increased $2.7 million to $36.9 million, reversing a $4.1 million decrease in the second quarter. The company attributed the rise to higher marketing investment to support wipes and personal care, partially offset by lower third-party service fees. Selling, general and administrative expenses as a percentage of revenue increased about 50 basis points.

GAAP net income was $91.3 million, or $0.81 a share on a diluted basis, including an $89.4 million discrete income tax benefit from releasing the valuation allowance against net deferred tax assets. Underlying Adjusted Net Income, which excludes that tax item and the apparel liquidation, was $3.1 million, or a 3.9% margin. Underlying Adjusted EBITDA was $6.3 million, or a 7.9% margin.

Cash and cash equivalents were $103.0 million at September 30, 2026, with no debt outstanding. For the nine months ended September 30, 2026, net cash provided by operating activities was $33.3 million, compared with $4.2 million used a year earlier. Free cash flow was $30.5 million for the nine months, versus negative $4.5 million a year earlier. The company repurchased about 7.2 million shares for $25.0 million during the nine months at a weighted average price of $3.47 a share.

On October 30, 2026, the board approved a new share repurchase program for up to $30 million of outstanding common stock after completing a prior $25 million program as of August 6, 2026. The company said it expects to fund repurchases with a combination of existing cash and cash flows from operations.

The company raised its full-year 2026 outlook for a second consecutive quarter. It now expects revenue of $322 million to $325 million, organic revenue growth of 6% to 7%, Adjusted Gross Margin of 45.5% to 46.5%, and Adjusted EBITDA of $25.0 million to $26.0 million. The outlook reflects assumptions including current tariff levels and tariff mitigation measures, which the company said are subject to change.

More on HNST

September 28, 2026 QBook Stronger demand supports expansion as pricing diverges

Honest Company, Inc. — all coverage and financials