Honest Company Files 2023 Annual Report on Form 10-K

TL;DR

<b>Honest Company, Inc. has filed its 2023 10-K annual report detailing its financial performance and business operations.</b>

AI Summary

Honest Company, Inc. (HNST) filed a Annual Report (10-K) with the SEC on March 8, 2024. Honest Company, Inc. filed its annual report for the fiscal year ending December 31, 2023. The filing covers the period from January 1, 2023, to December 31, 2023. The company's principal business address is 12130 Millennium Dr., #500, Los Angeles, CA 90094. The filing was made on March 8, 2024. Honest Company, Inc. is incorporated in Delaware.

Why It Matters

For investors and stakeholders tracking Honest Company, Inc., this filing contains several important signals. This 10-K filing provides a comprehensive overview of Honest Company's financial health, operational strategies, and risk factors for the fiscal year 2023, crucial for investors assessing the company's performance and future outlook. The detailed financial statements and disclosures within this report are essential for understanding the company's revenue, expenses, assets, liabilities, and cash flows, offering insights into its market position and growth potential.

Risk Assessment

Risk Level: — Honest Company, Inc. shows moderate risk based on this filing. The company's financial performance and ability to achieve profitability are subject to market competition and consumer demand, as indicated by the nature of its business in the retail catalog and mail-order sector.

Analyst Insight

Investors should review the detailed financial statements and risk factors in the 10-K to assess Honest Company's financial stability and growth prospects.

Key Numbers

• 20231231 — Fiscal Year End (Conformed period of report)
• 20240308 — Filing Date (Filed as of date)
• 5961 — Standard Industrial Classification (SIC code for RETAIL-CATALOG & MAIL-ORDER HOUSES)
• 0001530979 — Central Index Key (Filer's unique identifier)

Key Players & Entities

• Honest Company, Inc. (company) — Filer name
• 12130 MILLENNIUM DR., #500 (company) — Business address street 1
• LOS ANGELES (company) — Business address city
• CA (company) — Business address state
• 90094 (company) — Business address zip
• DE (company) — State of incorporation
• 001-40378 (regulator) — SEC file number
• 20240308 (date) — Filing date

FAQ

Industry Context

Honest Company operates within the retail catalog and mail-order houses industry, focusing on consumer goods.

Regulatory Implications

The filing is a Form 10-K, an annual report required by the U.S. Securities and Exchange Commission (SEC) for public companies.

What Investors Should Do

1. Review the full 10-K filing for detailed financial statements and management discussion.
2. Analyze the company's business segments and revenue streams.
3. Assess the identified risk factors and their potential impact on future operations.

Key Dates

• 2023-12-31: Fiscal Year End — Marks the end of the reporting period for the 10-K.
• 2024-03-08: Filing Date — Date the 10-K was officially submitted to the SEC.
• 2021-05-07: IPO Date — Date of the company's Initial Public Offering.

Year-Over-Year Comparison

This filing represents the annual report for the fiscal year 2023, following previous filings which would include quarterly reports and potentially prior annual reports.

Key Financial Figures

• $0.0001 — nge on which registered Common Stock, $0.0001 par value per share HNST The Nasdaq St

Filing Documents

• hnst-20231231.htm (10-K) — 2016KB
• exhibit1020-ontex1124redac.htm (EX-10.20) — 131KB
• honestcoq4-23ex1021xdballe.htm (EX-10.21) — 60KB
• honestcoq4-23exhibit231.htm (EX-23.1) — 2KB
• honestcoq4-23exhibit311.htm (EX-31.1) — 11KB
• honestcoq4-23exhibit312.htm (EX-31.2) — 12KB
• honestcoq4-23exhibit321.htm (EX-32.1) — 6KB
• honestcoq4-23exhibit322.htm (EX-32.2) — 6KB
• exhibit97-doddxfrankcompli.htm (EX-97.0) — 42KB
• hnst-20231231_g1.jpg (GRAPHIC) — 32KB
• hnst-20231231_g2.jpg (GRAPHIC) — 33KB
• 0001530979-24-000028.txt (&nbsp;) — 10965KB
• hnst-20231231.xsd (EX-101.SCH) — 65KB
• hnst-20231231_cal.xml (EX-101.CAL) — 108KB
• hnst-20231231_def.xml (EX-101.DEF) — 366KB
• hnst-20231231_lab.xml (EX-101.LAB) — 826KB
• hnst-20231231_pre.xml (EX-101.PRE) — 635KB
• hnst-20231231_htm.xml (XML) — 1532KB

Risk Factors

Item 1A. Risk Factors 12

Unresolved Staff Comments

Item 1B. Unresolved Staff Comments 51

Cybersecurity

Item 1C. Cybersecurity 51

Properties

Item 2. Properties 52

Legal Proceedings

Item 3. Legal Proceedings 52

Mine Safety Disclosures

Item 4. Mine Safety Disclosures 53 Part II 54

Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities

Item 5. Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities 54

[ Reserved ]

Item 6. [ Reserved ] 54

Management's Discussion and Analysis of Financial Condition and Results of Operations

Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations 55

Quantitative and Qualitative Disclosures About Market Risk

Item 7A. Quantitative and Qualitative Disclosures About Market Risk 69

Financial Statements and Supplementary Data

Item 8. Financial Statements and Supplementary Data 70

Changes in and Disagreements With Accountants on Accounting and Financial Disclosures

Item 9. Changes in and Disagreements With Accountants on Accounting and Financial Disclosures 102

Controls and Procedures

Item 9A. Controls and Procedures 102

Other Information

Item 9B. Other Information 102

Disclosure Regarding Foreign Jurisdiction that Prevent Inspections

Item 9C. Disclosure Regarding Foreign Jurisdiction that Prevent Inspections. 102 Part III 102

Directors, Executive Officers and Corporate Governance

Item 10. Directors, Executive Officers and Corporate Governance 103

Executive Compensation

Item 11. Executive Compensation 103

Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters

Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters 103

Certain Relationships and Related Transactions, and Director Independence

Item 13. Certain Relationships and Related Transactions, and Director Independence 103

Principal Accountant Fees and Services

Item 14. Principal Accountant Fees and Services 103 Part IV 104

Exhibits, Financial Statement Schedules

Item 15. Exhibits, Financial Statement Schedules 104

Form 10-K Summary

Item 16. Form 10-K Summary 106

Signatures

Signatures 106 1 SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS This Annual Report on Form 10-K contains "forward-looking statements" (within the meaning of Section 27A of the Securities Act of 1933, as amended ("Securities Act"), and Section 21E of the Securities Exchange Act of 1934, as amended ("Exchange Act")) about us and our industry that involve substantial risks and uncertainties. In some cases, you can identify forward-looking statements because they contain words such as "anticipate," "believe," "contemplate," "continue," "could," "estimate," "expect," "intend," "may," "plan," "potential," "predict," "project," "should," "target," "will" or "would" or the negative of these words or other similar terms or expressions. Actual results or events could differ materially from the plans, intentions and expectations disclosed in the forward-looking statements that we make. These forward-looking statements involve risks and uncertainties that could cause our actual results to differ materially from those in the forward-looking statements, including, without limitation , those set forth in Part I, Item 1A, "Risk Factors," and other factors set forth in other parts of this Annual Report on Form 10-K. Furthermore, such forward-looking statements speak only as of the date of this report. Except as required by law, we undertake no obligation to update any forward-looking statements to reflect events or circumstances after the date of such statements. These forward-looking statements include, but are not limited to, statements concerning the following: our expectations regarding our revenue, cost of revenue, operating expenses, gross margin, adjusted EBITDA and other operating results, including as a result of the Transformation Initiative; our expectations regarding the costs, impacts and benefits of the Transformation Initiative; our strategic initiatives and priorities, including our Transformation Initiative pillars of Brand Maximization, Margin Enhance

Business

Item 1. Business Overview Of Business The Honest Company (the "Company," which may also be referred to as "we," "us" or "our") is a personal care company dedicated to creating clean- and sustainably-designed products . Our commitment to our core values, continual innovation and engaging our community has differentiated and elevated our brand and our products. Since our launch in 2012, we have been dedicated to developing clean, sustainable, effective and thoughtfully designed products. By doing so with transparency, we have cultivated deep trust around what matters most to our consumers: their health, their families and their homes. We are an omnichannel brand, ensuring our products are available wherever our consumers shop through our Retail and Digital channels. Our differentiated platform positions us for continued growth through our trusted brand, award-winning multi-category product offering, deep digital-first connection with consumers and omnichannel accessibility. Our Products and Product Categories Our Chief Executive Officer, as the chief operating decision maker, organizes the Company, manages resource allocations, and measures performance on the basis of one operating segment. Our three product categories are Diapers and Wipes, Skin and Personal Care and Household and Wellness, which represented 63%, 26%, and 11% of our 2023 revenue, respectively. Diapers and Wipes. Primary components of our diapers include responsibly sourced, plant-based fluff pulp and other plant-derived materials. Our diapers have an extensive modern and efficient design that uses less material. Our Clean Conscious TM wipes are compostable and plant-based, made with over 99% water and gentle on sensitive skin. Skin and Personal Care . We use clean and safe ingredients, including many naturally-derived ingredients that, most-importantly, are effective. We have an extensive line of bath, body, skincare and beauty products designed for a range of skin types and concerns, many

View Full Filing

View this 10-K filing on SEC EDGAR