In its prospectus, Honest said its sales increased 27.6% to $ 300.5 million in 2020, from $ 235.6 million in 2019. It lost $ 14.5 million in 2020, or 85 cents per share, down from a loss of $ 1.83 per share the year before. The business has never been profitable. In fact, in its prospectus, the company admitted, “… we may not be able to achieve or maintain profitability in the future.”
Last year, while all product categories increased from 2019 to 2020, The Honest Co.’s home and wellness revenue increased 116.5% to $ 32.5 million. The company attributes the gain to sales of the sanitation and disinfection products we launched in 2020, particularly through the retail channel.
Well, not exactly. In 2017, the company settled a lawsuit who claimed to have fraudulently labeled some of their products as “natural”, “herbal” or “no harsh chemicals (never!)”.
Overall, diapers and wipes accounted for 63% of the company’s total sales in 2020. Part of last year’s revenue growth was driven by an increase in digital sales, which accounted for 55% of its revenue. Digital brands like Honest, which sells products on Honest.com and digital retailers like Amazon, benefited from a global shift to e-commerce last year, as physical stores closed during the coronavirus pandemic. Ecommerce sales in the United States surged 32.4% in 2020 to $ 791.7 billion, according to the US Census Bureau.
“We are seeing more and more consumers self-educate themselves on the benefits of clean, natural products through social media, influencers and other online content, which drives digital engagement and purchases that support the continued disproportionate growth of the e-commerce channel, ”the company wrote in its prospectus.
The Honest Company was founded in 2012 when Alba has partnered with Christopher Gavigan, Brian Lee and Sean Kane to launch an eco-friendly line of family essentials offered through a monthly subscription service at Honest.com. At the time of launch, tIts founders said they were “committed to making safe and sustainable products more convenient, beautiful and affordable” and that they would offer consumers products ranging from personal care to babies’ needs, such as diaper wipes to household cleaners.
“I’ve spent far too many hours researching products and driving trying to find safer, more environmentally friendly options for my kids,” Alba said at the launch. “I knew most people didn’t have that kind of time, nor the means to pay the full price. had to make your job easier. “
The main shareholders of The Honest Company are L Catterton, IVP, Lightspeed Venture Partners, Fidelity and General Catalyst.