Earnings call transcript Q4 2022

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Operator

Ladies and gentlemen, thank you for standing by. Welcome to The Honest Company’s Fourth Quarter 2022 Earnings Call. [Operator Instructions] Please be advised that today’s conference is being recorded. I would now like to hand the conference over to Mr. Steve Austenfeld, Vice President, Investor Relations at Honest Company. sir. ahead, go Please

Steve Austenfeld

Thank XXXX joining conference everyone. and fourth full year call. you morning, our for quarter Good

Joining me today and Kelly are Carla Vernon, our Financial Chief Chief Officer. Kennedy, Executive Officer;

that we could that filings are our within I or These statements today and matters results to would statements only obligation laws, Please call risks Before federal our detailed issued information new of business of this forward-looking a except forward-looking our law. the revision revise release make our issued the results. more the actual reflect including we in today as remind note that statements the of to may any as our start, statements about of undertake you and statements description certain a these we in the these that forward-looking our earnings as to and like referenced differ affect required well securities meaning also future will today. of other to of involve SEC opinions number or of forward-looking uncertainties refer publicly materially. cause by results for release Please no risk date release as earnings of events, factors that light outlook to

to this call, impact the eliminate of results which measures, certain GAAP during Also, our we will financial discuss adjust items. non-GAAP

also and Investor financial broadcast our in You live today’s investors.honest.com. reconciliation find call release. the of will the section Relations website measures these this a results earnings non-GAAP of on of information non-GAAP these GAAP at is financial regarding of section to measures additional available A

over turn to will it I that, With Carla.

Carla Vernon

The us am in and many Company months speaking morning, Honest of meeting thanks to of you and as the for everyone be Good new look Steve. to I today. CEO I forward joining with you the glad Thanks, ahead.

got consumables categories was supply ago, to to hand participates the digital retailer role, e-commerce we storefront the get know strongly several key at and which serve had categories. that retailer The I performs a that elements for key in of a know leaders, business. also get to Alba. first including of Vice over those the States, brand the view a X Honest the our high-performing In opportunity the In our Honest how the consumers operational Honest, categories Founder, President I at starting the months oversaw of chain partnership, United running vendor leading also with opportunity the little I e-commerce and Before me gave innovation I in. that of to Jessica

for beginning designed have the another me that set of of impressed products helped partners, of to brand, Honest with the make My Honest. ground all e-commerce the at that nicely here work leading mission purpose-driven experiences hit Since people. running been I categories in consumer products, and early strength have Honest quality The builds the of on

most classic financial, important than building have portfolio. decades America’s understanding In operational role, strong and ran a me growing CPG As brands. company, president, a a deep portfolio have consumer leading required for a two some founder-built at also of businesses, brand of to I that drivers the I experience and sustainability-driven more giving of division a

new Wellness. by Honest Personal product bringing to XX line modernized categories Care and from like culture standard a sustainability many much models me mission-driven brands and to and launched categories years disrupted sustainability, ESG allowed the degree into business in ranging ago, to When and in profitability career was build Baby, strong principles and ecology bottom My of of Honest. design it Beauty Household triple business

and categories a broad available highly us for and have retail and relatable to has origin our manufacturing innovation and through a stores our of be to And as era Honest points, brand to Gen seeing them of in a talk with Z to opportunity our and with in that poised and cross-section spent brand have in have life. Honest mission we importantly, grounded Honest, that the attracts partners a the touch And our to employees I and business future answer company. allowed standards lead about products is to time time the base. built gives is the believe along had meet Honest I ahead. Honest’s have and relevant, company embedded for powerful brand products efficacious clean ever drive that in again, the to truly ways consumers great Our our some time me partners. my The I These omnichannel with model. key joining comes in resonates many strength with firmly with the team opportunity Since and the consumers consumer have had diversifying a Honest. most the confidence our an that what values of the early growth the I

are team, partners company as they a I our revenue set our profitable and with do the noted a However, reflect be am in our results. strategy defining release, and up thrilled and satisfied strength journey. earnings actions on focused taking potential The to of in will of Honest margin to relentlessly XXXX, stronger, the support XXXX brand. We not next us I In be we Honest in the many we believe consumers, beyond. not more and the and to stage

turn you to I Kelly, it will review the to financials. over

Kelly Kennedy

which continuing in faced pressures, Thank came welcome but which and impacted cost you, in ahead Carla slightly pleased revenue margins. everyone. quarter, were We with expectations, of the

as year resonate the pricing to quarter healthy fourth partially by continues results, reflecting categories is up outpace as softness with ago driven was in the revenue performance to digital by line, well channel. retail, top channels share the The strong quarter compete. X% and offset with continues in our gaining clear increases actions fourth Honest where versus was consumption XXXX distribution growth consumers. on in brand the XX%. these Starting market consumption taken up a is in continuing Honest we as Based in tracked it Honest

price Our unit are following remain supporting and growth. increases velocities our as pricing both healthy, top volume line XXXX

key product by drivers category, Wipes. Diapers first, and to Turning

Our and Wipes up Diapers category also outpacing around this reflected benefit percentage X%. consumption assortment. quarter and expanded was and benefited up XX%, was diapering. beyond of expansion the increased revenue and approximately from by was XX of over XX% the retail consumption home Wipes price Wipes usage represented distribution business points. Growth up XX% diapers increases, growth

customer compostable. portfolio lagged and in offset XX% and they that a in consumption innovate channel. category can of are purchases. announce in Diapers also were Strong declining gains traffic digital fourth our to reduced home now as and key continue this by Wipes We with consumption quarter baby our wipes Shipments digital subscriptions

shipments XX% Skin quarter, impacted reduced and which XX% Personal our by Revenue mentioned Care, key represented declined the year-over-year. total customer. digital revenue was by nearly this we of

it is of continue of carrot, kale, a such and Latino green fresh space to speaks antioxidant minimalist the was mind. care. and Goji, new QX This to juice super it Skin skin consumer apple, With daily with launch tea Z serum We innovate our Care Beauty easy-to-understand in by in developed feeling serum. the trend inspired green lemon, the our as moisturized ingredients, and the and Gen portfolio with

quarter Clothing. wellness Our represented by of revenue just Baby driven year-over-year Honest and this over XX% doubled business household and

in anticipate as pajamas list this towels, nicely Oprah’s In We things our seasonal solid on favorite bedding, continue a year Care a QX, offering. current family our blankets business to on pajamas second was growth in XXXX in complement row. and Baby XXXX Honest for

return higher marketing, bundle Revenue in as basket well of largest build-your-own channel. headwinds, recent shipments these digital softness broad declined and digital of was we shifted to to lag XX% expansion. at to as Now wins QX platform, digital checkout customer. are products, XX% Digital the retail channel channel. retail speed well as a consumption faster by Despite XX% turning which retail support sizes. we expanding and digital, near-term cost increased distribution marketing site cross-section results light And reflecting of revenue opportunities program larger in as our digital drives our to the split, as spend include improve continuing including to in

XX%, we at largest in-store and distribution retail, strong our In customer, expansion, gains where to increased increased strong placements consumption over reflecting XXXX, XX,XXX. XX,XXX locations from turning Now traffic execution. and assortment to revenue retail

At from ACV consumption increased X,XXX Target, Walmart quarters additional at result, distribution growth. and wins largest XX we year our included addition year-over-year to achieved assortment a XX%. Ulta the of during customer, Kroger. into launch XX% the of Publix, As consecutive Key stores over the and

brand We personal that at are very baby become one Honest Target. the number has care pleased

This XXXX. cost higher and of mix. costs Now quarter XX% reflects XX.X% turning points in XXX was of basis in the XXX XXXX impact by the savings positive to quarter supply gross to basis fourth pricing, from of Gross margin. fourth points approximately chain offset favorable compared of margin

We have inventory standardization a QX an quarter XXXX. continued which million post-COVID in experience slowdown in line non-cash to resulted reserve in business, with $X approximate in the our

distribution. our was support million where effectively Marketing costs exclude XX% were can if in tactics, sales, CEO digital expense. marketing from we higher-return levers, increased in expenses we $X investment litigation we plan. spend of year this believe retail operating profitability. transition to lower and security and than Operating reach our million line We Turning marketing shifted but funnel and with $X expense the quarter, a ago lower new cost million $X consumers

fell Adjusted being warehousing $X $X to to XXXX. to product XXXX well We from for EBITDA for an related standardization million, negative as our experienced the positive goal pressure escalated the short QX the reserve QX we a of $X.X inventory transportation million nearly million quarter margin quarter of costs. due favorable improvement and of the was and of fourth

normalized credit XXXX. balance in Turning million equivalents financial new down facility to that generating $XX cash. levels, $XXX Over In we $XX short-term inventory a reflected in with to more supplier into cash asset-based provides and purchases expect with ended million entered sell we no in inventory the of us million increased debt. approximately early more fourth the quarter $XX January, cash, in sheet. in to advance prices XXXX, flexibility. This with million investments We

We future to up $XX request support to have ability the million investments. growth to

Now turning to XXXX.

foundation highlighted, of a we As on brand, significant we’ve do. have And stand we to the started. but strong work already gotten Carla

positioning, in premium new year our introducing savings revenue our improved our would programs to be improvement results. and communicated adjusted actions as XXXX Prior our we’ve fiscal XXXX recently XXXX EBITDA we example, reflect to roadmap, with well. cost For margin and line robust initiated in full pricing year

Carla With turn we that, it it for questions. back open let before to me up

Carla Vernon

Thanks, that not I reinforce are we want Kelly. satisfied. to

is advancing pricing strategy, improving of initiatives our premium to quality margin head on meaningful Despite focus Honest now structure. We with back marrying challenges the business to benefits challenges, our and in path So along our expected positioning a savings our in on XXXX our and profitability product cost plan with confident. current and we address our are to put on XXXX. the

healthy, market and is is shares strong. Our are distribution our brand The growing, Honest

forward the With questions. that, turn to I and call the to will answering your operator, we over look

Operator

from with first of Instructions] Our [Operator Capital. Laura you. question Thank Loop comes the Champine line

line is open. Your

Laura Champine

taking It’s Thanks question. questions. of for my a and longer-term Carla, it’s sort for

of what given the kind are trajectory Can the your around? ones talk this the business in since little digital bit the hoping So you particular turn for. been we for IPO, that channel, steps to about, a that business had not had action has growth background

Carla Vernon

you. lovely question. Hi, meet Thank that for Laura, you to absolutely. Yes, it’s

categories, is to excited many categories as the the One in. of that have all of At of the am President that the Categories, categories for I fronts be experience you Honest of I Honest Consumables I and Vice Amazon. might bringing Amazon, digital had for responsibility things store the to so center-store at were those consider that participates

better responsible I storefront brands In storefronts. to also innovation my has and do the from customers show efficient bring they them. store That on and do shopping, the do digital today’s that into at about those in for shopper clear, really Honest for experience order directly we to pull are that the and that can in expectations I fast really to and sure experience the to life addition efficient continues how so to on were honest.com are making what what highly so storefront storefronts, responsible to make everything things digital maximize what customize we the team is meet transactions being experience we storefront going that’s relevant sure that team the being we of an consumer the so need the of here how to our it’s to with and on collaborate and when for you to front that

partners, is through as continuing to life that retail that, invest to right? of are continue our our they mediums retail partnerships, brought to Honest strongest grow digital being want the life our addition also with digital to and effectively is in. we So In brought business sure to to grow some that make we in

Laura Champine

Great. Thank you.

Operator

Thank Telsey Group. the you. from question of Telsey line next comes Instructions] Our [Operator with Dana

line Your open. is

Dana Telsey

Good is. morning. whichever meet it Good afternoon, to Carla. Nice everyone, you,

you move as distribution, you’re as about think fiscal think vein about in the do revenue about you Thank that margin and how portfolio thinking given year retail you this have of of roadmap, think guidance margins you And pricing? the the expanded how upcoming and are it thinking As of going we what How could like look forward? the improvement of you. now you it forward? about

Carla Vernon

as to you, meet Thank Good well. Dana. you

me get I to margin is, far we sure thing not satisfied delivered The profit. make across we thus for first and have on are most with and and emphasize on important what

on that important life our and as improve Margin that we a will have for our team quickly to operate assess our as to footprint develop address sure we margin is is is of roadmap. so And fix optimize with our to so and number that margin squarely are about most rigor you’ve level, to that portfolio us things and making through brought important business. will That of continue we on what how to the we pricing continue focused said. and we a discipline things do really we

I’m what allow with more projects. for work is imperative plans also on pricing, out detail about but and that to do think it So Kelly our to in going get is cost cost I savings you we

else one I discipline within you really projects important the drivers I’ve more conversation and we to have opportunities since of in forward specifics outlook. applying sure is improving many of exploratory the very have us cost on to with understanding and look and the but being to we my of back areas are about address, you P&L. for that tell the make being are those in underway margin all there We where accelerated we already going time our are that to pieces partner arrived, the

of Then, is also by outlook the course, driven mix. portfolio the margin

So reimagined well with the speed play growth, are the in to are think, to items categories really we’re think can means margins we that have be to where in our we to start considering we that I as be our assess get will choices which don’t up our to as in looking trajectory, a – items margin have we that want brand we input choices win that position. or portfolio and premium ourselves that overall are make we and driving and to and premium our we brand need that is make will that you a to accretive at some margins roadmap and know as the and always Honest which retracting we portfolio, that fit we for will The allows margin of pricing fits that that a make, lead whether delivers from us start that can margins

Kelly Kennedy

little portion And pressure. in XXXX, covered basically that to that in on take roughly that a pressure. in kind cost I’m XXX everyone our wanted pricing do and happy because of did talk only input but highlight points perspective, approximately basis plan what pricing it XXXX we a pricing cost of of and half we put remind to today. we input in did to I faced action on XXXX, significant first portfolio, of we

our a is ideal basis the the into left in we that product for where premium of XXX price conventional us around to kind us competition. points. position done What has lost So

to going return to XX% our it we to pre-COVID that will like So and where we the our it’s and for will effect mid-year of leading were revenue of high of And going diapers, player. that go be pricing have premium, of announced over kind all roughly mid increases price XXXX. into single-digit product example, back premium pre-COVID half on to in pricing us course at categories, XX% base. the is areas impact

our it The We’re now Honest down about that, that It return positioning. that. we where aligns brand, will premium, for half with our of know to premium is,

impact In about points, of be will to digital pricing back going but overall be that half basis weighted. addition, XXX it’s

So we’ve as pricing cost input margin with will that see we and pressure the in are That’s we facing well first as reflective we XXXX, we’re end pricing as in move additional fully have get to the cost about in will thinking impact XXXX pressures taken. the the pressures half XXXX. of line and our of in on how top we offset both the

Dana Telsey

inventory quarter? Thank at follow-up pace how of you. the as Thank on And given move end increase of see the levels, you. just forward XX% inventory the one do we you this

Kelly Kennedy

levels, ahead should inventory be. we’re of On Yes. we know that where we

already started actions. have We taking

You’ll see the we will course that million XXXX, will paced the reduce be inventory by $XX that and quarter. over across approximately of

us built see times cash now So a we lead in use seen was normalized. it you We’ve – as will of XXXX. inventory

are process generation of generation We us cash in of kind being a turning in of – the the now that corner XXXX. in for terms

Dana Telsey

you. Thank

Operator

from Instructions] the [Operator question next with Andrea you. line Teixeira JPMorgan. of Thank Our comes

is line Your open.

Andrea Teixeira

Honest Great And Carla, have everyone. The leading welcome. to you Hi, Company. you. Thank

bad regarding what some X% not being still pressures the in of front you ‘XX what growth half just on SG&A out it terms was the I to So are that expected called the side, probably recurring. margin I carryover that initially Kelly, believe Clearly, like there overview to before team front, happened and and the that Obviously, the pricing. joined and on also IR given don’t both discussed a on be that, of that seems earlier you gross first with wondering margins the was Steve potentially Elizabeth I Carla you in quarter. X% removed your

comment have why So bit that, ladder your is negative a you so taken if pricing. have which been given little to can the actually line, your to more top your attractive competitors, price relatively on things point,

that there happen. taken haven’t You orders finally down, that happened Amazon as would they is mostly in. get the that taking pricing What Clearly, didn’t much. and thought inventory we

of the So a know mentioned also explain? Carla, you rightsizing on can – also kind portfolio. it’s you I then lot, you but your of mentioned possibility And

of be. category, course, of sense, kind of terms first in XXX company How of I the would investments seems dream, number was we or be margins of to VMS. direction; explaining right It including the in kind So not the two, in should was this moving of one, Honest The in you. like fruit. some wondering, of bear extending line some to next the point the some plan win those the years they that looking coming it right at of so make top thinking should weeks is us few and Thank getting and at your what where the number getting, did

Kelly Kennedy

we Clearly, first be to but let first talk the revenue to track. moderate what move about XXXX. start, it about the bit talking and by back I half, as half, margin. turn we let a I’ll to I’ll that as do little I then just Thanks, in XXXX growth over into – revenue with on is anticipate We and line Carla. Andrea. do thought start would in think I’ll me expect about we expect we

the anticipate, are short-term to on our velocity. based that will our a be track on healthy will We unit pricing see we we consumption impact do We see channels. taking that continuing in

pricing we products XXXX, have in Particularly – the with also taking. we same on new we recognized the business been in pleased incremental and seen consumer will we to to exciting be is Walmart, right layer clothing, pricing very in the really the have the have will Southeast another been we have on and be we deemed elasticity path. a an We – Both which but and Walmart baby saw in with on that, us, that pleased. penetration has

particularly headwinds, see in traffic. and to continue digital in we declines However,

We spending we seen a higher shifted return. our have also where have to

has our marketing do our marketing really and more reduced allowed we intentionally us digital funnel leverage efficiency feel have have lower spend, to and we that, our of kind So, within that spend.

overall, against there are about So are healthy. don’t trends going levels have the We to inventory if us. you anticipate Amazon – think still of we XXXX, think

but closely in seen have We It trends their Amazon. been that was X% know inventory. very they we good some consumption QX, have managing positive in

around maybe positive So impact revenue and really continued again, headwinds the to what pricing digital that XXXX approach on short-term, trends reflects the on really side, although tends and over retail a time dissipate. do, we in the thoughtful velocity

us, you those pricing in about take as think We transportation, warehousing we cost our we than pressures for but seeing both are costs, it correct, to in feel margin, that’s well anticipated. very as And stronger we to And really As costs. around product are we XXXX. input cover confident ability across didn’t that’s timing. take

is there will and into get XXXX, anticipate have see timing course that the we and so delay pricing cost the taken, pressure a will, we positive. so very back actions input in pressure margins And that on the covering the impact continue of with we margin as pricing of although over the we XXXX XXXX, see half improve to and

Carla Vernon

Andrea, Carla. this is

question. the trying that we we has future. am still what look clear play right if I on make am categories think that category out see in as opportunities and I question to I want to believe as your to your sure to multiple So, the if we interpreting I is expanding Honest understand

understanding that’s you want So, if to the thank question, what you. I is right your tell

classic that all, founder-built the to like through ability brands weather to in or shown of of test of Honest like their like companies as brands that Valley. Annie’s have Nature startup time, as and founder-built start-up – well First I came my both the like running is running Larabarm, Cheerios experience reason

Z fundamental era. era, that and of this say brands for I a Gen born is beliefs always consumer in my One that Honest was right, in born

single more or to to of of that single One demonstrated already point relevance. to things have just of important the ability shoulders The category than that has a be was with brand brand. relevance the broad Honest true whether And a have is

expand I in and categories early was think the that so. important to brand choices to multiple continues be to its history

of know already that every message I from groups We is that stages, right. consumer my clear demographic across that every age are to Honest the to have and One group, want group. relevant demographic is life going do things we what make we across cultural across

And and going operate we push want categories go will categories lots opportunities forward ahead to That’s want Honest portfolio we and make where farther that purpose-driven our communicate are assure choose are be will win categories innovate those that we that’s with ethos. exist but categories strategy, of and also those inputs can what ways so We the as positioning our with overall the choose forward, our we with we because lead, put to to the we there where to I today. fit thoughtful us. allow of play, our categories we exist products it consumers do. margin the how to that into the we But thoughtfully you with can will premium premium of choices we our

Andrea Teixeira

not pricing, the come Carla. does puts point include takes the in does to Kelly’s about it volumes going guide, that’s are So, on – helpful, it And down. pricing, Obviously, to your and not the no,

of just rationalization does ongoing include getting an categories, it’s basis? of is as on it it any out not So,

Carla Vernon

that continued are I going we to our portfolio had de-prioritize of sense – even right. may there to in lot over XX opportunity everything I that we be something strategy, But today play. things to bring both Well, the the want have where program to And We invest. still and categories matter going is, understand, of in retailer, do and ability can that’s benefits going consumer today going of. places things things is do out a to here, that on actually an on the working really is Andrea, been more to momentum new give weeks innovation will will and make are be assessment be But the part believe we are are our those and We and have course, to that by we we the the going current some the drive grow. have so embraced the of us be we want where will truth that and to forward. in we there we get the forward of refining growth

driving taking and really something the So, we our determining many, build. actually model had core, it emphasizing business where we of we places fundamental are at that That’s many margin our are the that really play profile some growth as brands hero fit products then things forward. and a them they that to to business growth have be the today look in of a forward will go what but new a of Valley, and we of where I business learned and very mix Nature some like offerings, on and or SKU fit really investing will opportunity going of to those don’t some model the brand have grow

Andrea Teixeira

marketing that quoted the don’t that embedded if some how understand should And and we removing in should and – items spending and overhead an of but we extraordinary I because or appreciate nice we thinking you banking be not be it much should how we go known I should you number, only guide? much SG&A. as can be have your see to mention adjusted did we will – Kelly, I – be That’s we thing, I the – should other sorry,

Kelly Kennedy

quick you highlight. give can I Well, a

to think in more allowed the you been us be spending efficient. we one have marketing, a of has talking about things lot the shift As that about how is

the quarter. And XX% fourth we so were at for

you absolutely look and like the term, more move we that you anticipate as in the XXXX. that adjust now, can we think the forward, efficiency, lean innovation. will baseline. our kind out into we can go of innovation And time, we and as And figure going marketing we appropriate I highlighted, be will to spend into found over we to as then Carla about right longer As But categories think that future what at.

been As carefully. relates I XXXX, that know managing have to very we SG&A, it throughout

example, X% for careful headcount savings we cautious within very focused actually mid-XXXX, we will well as were margin, For SG&A where but kind and on predominantly our will we down is be continue. savings SG&A been programs cost and from And in also as of well. our looking have are

Andrea Teixeira

Okay. you. will Great. it on. pass Thank I

Operator

standby Thank you. question. for our next Please

the from Jon Blair. Our Andersen William with next question comes line of

is line Your open.

Jon Andersen

everybody. forward meet person you nice future. in Carla, and look Good you meeting And morning the Hi. it’s in to to

Carla Vernon

Jon. you, Thank

Jon Andersen

detailed anticipated one the timeline bit that the something kind perhaps you question, could question. affect and are and the outlook. etcetera? at bit incremental you little the then talk detail initial working margin market, initial that And could have modify a you Thank is, happen say, for stores and to the wondering more Quick talk respect With some of have will provided? second laying kind of experienced, other kind in the right of and that your you. improvement diapers bit of housekeeping Walmart, perhaps example, this that more a then guidance roadmap if through for seeing Is that some are little little when of in kind question XXXX out about about in you kind a of of you could wipes that enhancements with rollout the you assortment Target, and results with now,

Kelly Kennedy

of There a is improvement in the to margin of the margin I improvement which going impact of out real start benefit some will Jon. quickly that, roadmap couple roadmap. benefit will a predominantly about XXXX, talking to XXXX. is Thanks components be but the to us

color already include On our starting, well take savings, example, – that time ingredients fulfillment transportation, we around which the are to that given for we already pricing on will items on XXXX. in packaging. embedded as roll the the and more have The projects really the provided actions are at cost that in looking actions will as

come So, those inventory takes those projects timing it implement and will third-party – because late those of the levels in to XXXX. in manufacturers, with

XXXX. So, beneficial those be would in

on between about and improvements that enhancing are pass working hero we through. that going bit our XXXX just a spoke begin higher-margin also our with can come Carla something also productivity in spoke suppliers little are We as working to we back. that’s on will think – we items, about And in costs lower I leaning what some

So, to I XXXX. benefit predominantly say improvement level margin high would roadmap

just question as revenue days XXXX. second But mentioned X% we around our are that represented The in, moved in really, it Walmart. early we in we with our of Walmart, around

are some momentum wipes, seeing really with Walmart. as a we program are and great such results doing We in special areas where

in the as Honest participated goes is some and also end days events. it product the to their – in Walmart of selected We featured March, of be started a baby to store mid-February,

that’s beauty, and where to as The question areas More what into and feel know things see caught going what such consumption we the we quarter, well. question to highlighted trends. that XX%. within of we on going your I as those quarters so I as the momentum not sure XX strength the data about us of certainly Target kind on XXXX has was. of we in am grew come that growth for more talk been And year-over-year more that have fourth Target, one consecutive had last I we far, the is time Jon, having

seeing we So, with momentum some overall with are business good our Target.

Jon Andersen

brand you more Carla, that brand the today? multiple addition you early of the to that the gives about What succeed in follow-up quick Thank know terms you around to just kind kind do portfolio maybe questions least subtraction of I the term, One days categories. in that see the the best you. of kind the of lot of as at get you and case? a of travel, kind still, or as referred speak can kind to that And confidence of you Great. across ability can is and reach the to for think Carla. brand it’s categories, I longer you more for of earlier,

Carla Vernon

those Thanks time subject a and adopted benefits Annie the about my was this the a take internalized brand has is benefits for Jon. so when experience categories a of talk then the I consumer license really of and to the me the where values happy understand, relevant. the that those build lot brand, at values am you to has brand the of brand, because great and across purpose to where

quality is like built something clean a all for times well the for high-quality built we as a expand were is more speak ingredients today, and far, modern our And values, modern the in tools input, all company are Founder, is a brand and by as obviously, categories. sort of so of with we brand can important the on Jessica, we Honest you true needs number those to believe value that life stages. because that that’s thing And really products unique of formulations, was are thoroughly as to all to a where them into set consumers, bring all you paying Honest always remains demographics, us worth our groups, And that founders. Honest DNA cultural

So, of confident category. Honest that waiting strong the broad are that category I come and the to many the of from of categories shoulders energize categories shoulders consumers expect and to the Honest they there think am that the weight Honest extremely values are for in are and what can bear change

growth distribution think love that more upswing I that with that this brand us know brand still partners our they growth. is tells retail partner our this our a to us the conversations is that on to let consumption and a drive is our and growth with

Jon Andersen

you. Thanks so That’s Thank much. really helpful.

Operator

I to queue. the like showing closing no for further you. turn Carla back to Thank in would questions I now the call am remarks.

Carla Vernon

Company, and talking extend I family to my thank as you Honest thanks team and real and privilege you to to support join want in to do forward we look The well. can’t Honest a interest and to It’s I your The you quarter. I honor enough. next Everyone, thank for my

Operator

for your and you concludes conference Thank Ladies participation. this gentlemen, today’s call.

You may now disconnect.

The Honest Company, Inc. (HNST) 16 Mar 232022 Q4 Earnings call transcript