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Jessica Alba-Founded Honest Co. Stock Jumps on Q3 Sales Beat

Honest Co. stock gains after the household and wellness company founded by Jessica Alba posts third-quarter sales that beat analysts' forecasts.

Honest Co.  (HNST) - Get Honest Company, Inc. Report stock gained more than 11% in early trading Thursday after the household and wellness company founded by Jessica Alba posted third-quarter earning and sales that beat forecasts.

Honest Co. posted a third-quarter net loss of $5.14 million, or 4 cents a share, vs. a loss of $1.99 million, or 6 cents a share, in the same period a year ago. Analysts polled by FactSet had been expecting a loss of 6 cents a share.

Sales increased 6% to $82.7 million, driven primarily by “…strong volume growth in our skin and personal care and diapers and wipes product categories primarily within our retail channel, partially offset by a decline in the household and wellness product category,” the company said.

Gross profit rang in at $29.8 million while gross margin registered 36%, “…reflecting strong demand for our product offerings as well as efficiencies from our ‘costovation’ strategies, which mitigated the negative impact of cost inflation,” the company said.

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Honest Co. went public in May at a price of $16 a share. At the time of its IPO, the company reported that its 2020 revenue totaled $300.5 million, up 27.6% from the previous year. The company posted a net loss of $14.5 million in 2020.

Alba, who co-founded the direct-to-consumer brand in 2011 and now serves as chief creative officer, said in a regulatory filing ahead of the IPO that "we were raising the bar for the entire marketplace and becoming a David to the many Goliaths out there along the way."

At last check, shares of Honest Co. were up 11.85% at $9.96. Since its trading debut, however, the stock is down 56.7%.