Jessica Alba's The Honest Company (NASDAQ:HNST) stock price is a lesson in 'overpromise... underdeliver'. Shares are down 19% in early trading Friday after missing consensus in its latest quarter and providing an outlook for the current quarter and year that calls for down or zero revenue growth. The dismal performance has led to at least two Wall Street downgrades.
In the fourth quarter, the company reported EPS of ($0.10), $0.04 worse than the analyst estimate of ($0.06). Revenue increased 3 percent to $80.4 million versus the consensus estimate of $84.59 million.
For the current quarter (Q1), the company expects revenue to fall 15% year-over-year. For the full year, revenue is expected to be flat versus 2021.
Guggenheim analyst Laurent Grandet highlighted that the" Skin & Personal Care" line was not delivering on the Beauty Re-stage expectation and supply chain issues, and cost inflation impacted gross margin severely.
"We think the miss on the quarter and the FY22 guidance reset that is ~20% lower in revenue ($321M vs. $393M) and about $30M lower (-$7M VS +$21M) in EBITDA than what was expected during the IPO process will not reassure investors on the company's ability to forecast," Grandet said. The analyst downgraded shares to Neutral from Guy and removed the prior $12 price target.
Elsewhere, Jefferies analyst Stephanie Wissink downgraded to Hold from Buy and slashed the price target of $5.00 (from $11.00).
Shares are down 19% in pre-open trade to $4.90 and 70% from the May 2021 IPO price of $16.
By Lon Juricic