Investor Strategic Update 2025 Forward Looking Statements This presentation contains certain forward-looking statements within the meaning of the federal securities laws, including statements about the outlook of our business and industry and other matters referenced in our earnings release and SEC filings. All statements other than statements of historical fact contained in this presentation, including statements on our business strategy, plans, objectives, financial results, operating results, potential m ...

The Honest Company, Inc. (NASDAQ:HNST) Q4 2024 Earnings Conference Call February 26, 2025 4:45 PM ET Company Participants Elizabeth Bouquard - Senior Director, Investor Relations Carla Vernon - Chief Executive Officer Dave Loretta - Chief Financial Officer Conference Call Participants Aaron Grey - Alliance Global Partners Andrea Lisher - JPMorgan Anna Glaessgen - B. Riley Securities Ryan Meyers - Lake Street Capital Markets Owen Richard - Northland Capital Markets Operator Ladies and gentlemen, thank you fo ...

Honest (HNST) came out with a quarterly loss of $0.01 per share versus the Zacks Consensus Estimate of a loss of $0.02. This compares to earnings of $0.01 per share a year ago. These figures are adjusted for non-recurring items.This quarterly report represents an earnings surprise of 50%. A quarter ago, it was expected that this consumer products company would post a loss of $0.03 per share when it actually produced break-even earnings, delivering a surprise of 100%.Over the last four quarters, the company ...

Revenue and Sales Performance - In 2024, the company's three largest retailers, Target, Amazon, and Walmart, accounted for approximately 30%, 34%, and 9% of total revenue, respectively[74]. - Approximately 87% of the company's revenue in 2024 came from sales to retail stores and their related websites, with Target and Walmart accounting for 30% and 9% of retail sales, respectively[96]. - Revenue generated from baby apparel was 12% and 8% of total revenue during the years ended December 31, 2024 and 2023, respectively[149]. Financial Performance and Losses - The company incurred net losses of $49.0 million, $39.2 million, and $6.1 million for the years ended December 31, 2022, 2023, and 2024, respectively[122]. - The company has a limited operating history at its current scale, which may complicate the evaluation of its business and future prospects[123]. - The company has experienced increases in manufacturing costs and has implemented price increases in 2022 and 2023 to offset input cost inflation[152]. - The company has a history of net losses and may struggle to achieve or maintain profitability in the future[122]. Operational Challenges - The company experienced distribution losses with two of its largest retail customers on certain diaper SKUs, impacting revenue and expected future diaper revenue[74]. - The company faces significant competition from established brands and emerging natural brands, which may pressure pricing and market share[77]. - The company has seen increased labor costs and competition for talent, impacting operational efficiency and employee retention[66]. - The company exited certain unprofitable retail and online stores in Asia and Europe, which may affect future profitability[72]. - The company may face challenges in accurately forecasting revenue and expenses due to changing customer behaviors and macroeconomic conditions[76]. - The company must effectively manage relationships with various vendors and third parties to support its growth and operational needs[68]. Marketing and Consumer Demand - The company implemented mid-single digit price increases across approximately two-thirds of its product portfolio in 2023, including diapers and wipes, which may negatively impact consumer demand[84]. - Significant marketing expenditures are required for new product introductions, and failure to achieve market acceptance could negatively impact the company's financial condition and prospects[99]. - Increased marketing and advertising spending may be necessary to maintain brand awareness and market share, especially in light of rising digital advertising costs since 2022[101]. - The company may experience challenges in acquiring and retaining consumers due to increased competition and changing consumer preferences[82]. Regulatory and Compliance Risks - The company is subject to extensive governmental regulations, and non-compliance could result in fines, penalties, and adverse effects on its business operations[178]. - Changes in laws or regulations may increase compliance costs and adversely affect the company's financial condition and operational efficiency[181]. - The company must comply with California's Proposition 65, which could lead to lawsuits and regulatory enforcement if not adhered to, potentially harming its reputation[180]. - The regulatory environment is evolving, and failure to adapt to new guidelines could result in litigation and enforcement actions that negatively impact the company's prospects[184]. Supply Chain and Delivery Issues - The company depends heavily on ocean container delivery for shipments from third-party manufacturers in China, and any disruptions could affect timely delivery[135]. - The company has been impacted by disruptions in supply chains, including labor strikes and trade disputes, which could affect product delivery and consumer experience[136]. - Trade disputes and tariffs could increase product costs and adversely affect gross margins, with potential material impacts on operating results due to new tariffs imposed on imports from countries like China and Mexico[248]. Legal and Intellectual Property Risks - The company has faced multiple class action lawsuits regarding product effectiveness and labeling, which have harmed its brand image and required significant resources to address[170]. - The company is exposed to claims of intellectual property infringement, which could result in substantial litigation costs and operational resource diversion, negatively impacting financial results[241]. - The loss of registered trademarks could enable competitors to gain an advantage, negatively affecting the company's brand perception[236]. Technology and Cybersecurity - Cyber-attacks, including ransomware, are increasingly prevalent and severe, leading to significant operational interruptions and potential financial losses[221]. - The company is reliant on information technology systems for processing sensitive information, and any compromise could result in regulatory investigations and loss of revenue[218]. - The company has implemented security measures, but there is no assurance of their effectiveness against evolving threats[225]. Corporate Governance and Stockholder Matters - The company has amended its certificate of incorporation to allow the board of directors to issue shares of undesignated preferred stock without further action from stockholders[262]. - Stockholder actions must be taken at a duly called annual or special meeting, not by written consent[262]. - Special meetings of stockholders can only be called by the board of directors, the chairperson, or the CEO[262].

Exhibit 99.1 Fourth Quarter 2024 Financial Highlights Compared to Prior Year Period: 2024 Financial Highlights Compared to Prior Year: "Our Q4 and full year 2024 financial results demonstrate that our strategy, which focuses on the disciplined execution of our Transformation Pillars of Brand Maximization, Margin Enhancement and Operating Discipline, is working. In 2024, we achieved record results ahead of our outlook with revenue growth of 10% and first full year positive adjusted EBITDA as a public company ...

Core Insights - The Honest Company achieved record quarterly revenue of $100 million, an increase of 11% from the prior year [1][4] - The company expanded its quarterly gross margin by 530 basis points to 39% compared to the prior year [1][4] - The CEO highlighted the successful execution of their Transformation Pillars, resulting in a positive adjusted EBITDA for the first full year as a public company [2][13] Financial Highlights for Q4 2024 - Revenue for Q4 2024 was $100 million, up 11% from $90 million in Q4 2023, driven by strong performance in baby apparel and wipes [4][9] - Gross margin for Q4 2024 was 39%, an increase of 530 basis points from 33.5% in Q4 2023 [4][6] - The net loss for Q4 2024 was less than $1 million, compared to a net income of $1 million in Q4 2023 [4][7] - Adjusted EBITDA for Q4 2024 was $9 million, improving by $4 million from the previous year [4][8] Full Year Financial Performance - For the full year 2024, revenue reached $378 million, a 10% increase from $344 million in 2023 [2][9] - Gross margin for the full year was 38.2%, expanding by 900 basis points from 29.2% in 2023 [2][11] - The net loss for the full year improved to $6 million from a loss of $39 million in 2023 [12][13] - Adjusted EBITDA for the full year was $26 million, compared to a negative $11 million in 2023, marking the first full year of positive adjusted EBITDA as a public company [13][12] Cash Position and Debt - The company ended Q4 2024 with a cash balance of $75 million, an increase of $43 million from the previous year, and had no debt outstanding [14][15] 2025 Financial Outlook - The Honest Company expects revenue growth of 4% to 6% for the fiscal year 2025, in line with its long-term financial algorithm [16][17] - Adjusted EBITDA for 2025 is projected to be in the range of $27 million to $30 million [17]

Core Viewpoint - The Honest Company has appointed Etienne von Kunssberg as the new Senior Vice President of Supply Chain, effective February 24, 2025, to enhance its supply chain operations and support its growth initiatives [1][2]. Company Leadership and Strategy - Etienne von Kunssberg is recognized as a seasoned supply chain executive with over 20 years of experience, having previously held leadership roles at notable companies such as Dole Packaged Foods, Henkel, Procter & Gamble, and Coty [3]. - The appointment aims to strengthen the supply chain team and align with the company's ongoing Transformation Initiative, which is critical for growth in the current supply chain environment [4]. Operational Focus - Von Kunssberg will report directly to the CEO, Carla Vernón, and will lead the Supply Chain function, ensuring effective operations for both day-to-day and long-term agendas [2][4]. - The previous Chief Innovation Officer, Steve Winchell, will now focus on driving Innovation, Safety, and Regulatory work, acknowledging his contributions to the supply chain during his tenure [2]. Company Background - The Honest Company, launched in 2012, is dedicated to creating cleanly-formulated and sustainably-designed personal care products across various categories, including diapers, beauty, and household care [6].

Core Insights - The Honest Company has announced that CEO Carla Vernón has been named to the 2025 CNBC Changemakers: Women Transforming Business list, recognizing her leadership and impact in the business landscape [1][2]. Company Performance - Under Carla Vernón's leadership, The Honest Company has strengthened its financial foundation, achieving record financial performance with $99 million in Q3 2024 revenue, representing a 15% year-over-year increase [2]. Leadership and Vision - Carla Vernón emphasizes the importance of representation and authenticity in leadership, stating that the company is on a mission to challenge industry standards and drive meaningful change [2]. - The company has implemented its Transformation Pillars of Brand Maximization, Margin Enhancement, and Operating Discipline to restore confidence and drive sustained growth [2]. Recognition and Events - Carla Vernón will be honored at CNBC's Changemakers Summit on April 8, alongside 49 other leaders, celebrating their collective impact on innovation and business [3]. Company Overview - The Honest Company, launched in 2012, focuses on creating cleanly-formulated and sustainably-designed personal care products across various categories, including diapers, beauty, and wellness [4].

Group 1 - The long-term sales and profit growth of personal care companies, specifically The Honest Company, is viewed positively by analysts [1] - The article emphasizes the importance of retail value investors who are cautious about losing money but are open to taking calculated risks [1] Group 2 - The author has extensive experience in teaching and consulting, indicating a strong background in business and investment [1] - The author co-manages an investment firm and has significant real estate holdings, showcasing a practical understanding of investment strategies [1]

Core Points - The Honest Company will report its fourth quarter and full year 2024 financial results on February 26, 2024, after market close [1] - An investor conference call and webcast will be held on the same day at 1:45pm PT/4:45pm ET to discuss the financial results [2] - The Honest Company focuses on creating cleanly-formulated and sustainably-designed personal care products across various categories [3] Company Overview - The Honest Company was launched in 2012 and aims to challenge traditional ingredients and industry standards through its brand and mission [3] - The product categories include diapers, wipes, baby personal care, beauty, apparel, household care, and wellness [3] - The company emphasizes its commitment to the Honest Standard, which reflects its dedication to product safety and sustainability [3] Investor Relations - Interested participants can access the live webcast through the company's investor website [2] - For phone participation, registration is required to receive dial-in details [2] - A replay of the webcast will be available on the company's website for one year [2]