After a year-long sales slump following its May 2021 initial public offering (IPO), The Honest Co. reported 5% year-over-year revenue growth in the second quarter and said it continues to focus on innovation and new retail distribution.
Read more: Inside Honest: 5 Things You Didn’t Know About The Newly Listed Personal Products Retailer
“I’m pleased we delivered mid-single digit revenue growth in the quarter despite an uncertain consumer environment,” The Honest Co. CEO Nick Vlahos said in the company’s Friday (Aug. 12) earnings release. “The Honest brand continues to resonate with today’s conscious consumer, as reflected in our strong consumption trends, healthy growth in our digital channel and continued new distribution wins.”
The addition of several new retail partners contributed to a 2% increase in retail revenue, and that growth is expected to accelerate during the second half of the year, the company said.
Honest products launched on walmart.com in the second quarter and will expand to 2,000 Walmart stores in the fall. The company also added Ulta distribution in the second quarter and is expanding distribution with new and existing partners — including Publix, BJs and Shoppers Drug Mart — in the second half of the year.
Read more: Honest Co. Hopes Retail P’ships With Walmart, Ulta, GNC Will Reverse Sales Slump
It also launched the brand internationally, adding Asian distributor SuperOrdinary.
On the innovation front, the company reported in an investor presentation released in March that it is well positioned in the growing “natural baby” category due to its plant-based diapers and baby wipes.
In the earnings release, diapers and wipes accounted for 66% of second-quarter revenue, up 9% from the same quarter the previous year.
In addition, the company launched a new wellness supplement line that is now available at GNC stores and at Honest.com.
“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,” Vlahos said in the release.
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