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Quality = revenue gains for The Honest Company

Quality = revenue gains for The Honest Company

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The Honest Company’s (HNST) ethical and responsible business model is starting to pay off. The beauty and consumer goods company released a mostly positive Q3 earnings report last week that gave shares a much-needed boost.

Revenue from the company’s skin and personal care products grew 28% from the same period last year, while diapers and wipes revenue was up 16%. It wasn’t all sunshine and rainbows though; household and wellness revenue fell by 71%. Overall, net revenue increased by 6%, but this was shadowed by a doubling of net loss to $5.1m.

The Honest Company was co-founded by Jessica Alba back in 2012. Alba was inspired by the birth of her first child as well as her own childhood illnesses to create baby products free from harmful chemicals and synthetic fragrances. The company is proud of its Honestly Free Guarantee that promises all of its products are free from "health-compromising chemicals or compounds."

Why it matters

The Honest Company went public back in May of this year in an offering that raised $412.8m and valued it at $1.44b. The stock jumped on its IPO but has since been in a slump, bringing its market cap below $1b.

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