# Honest Company, Inc. (HNST) Informational only - not investment advice. CIK: 0001530979 SIC: 5961 Retail-Catalog & Mail-Order Houses SIC breadcrumb: [Retail Trade](/division/G/) > [Miscellaneous Retail](/major-group/59/) > [SIC 5961 Retail-Catalog & Mail-Order Houses](/industry/5961/) Latest 10-K filed: 2026-02-25 SEC page: https://www.sec.gov/edgar/browse/?CIK=1530979 Filing source: https://www.sec.gov/Archives/edgar/data/1530979/000162828026011634/hnst-20251231.htm ## At a glance FY2025 · period end 2025-12-31 · filed 2026-02-25 · accession 0001628280-26-011634 · source: https://data.sec.gov/api/xbrl/companyfacts/CIK0001530979.json | Metric | Value | FY | Provenance | | --- | ---: | ---: | --- | | Revenue | 371,317,000 USD | 2025 | verified | | Net income | -15,686,000 USD | 2025 | verified | | Assets | 225,407,000 USD | 2025 | verified | | Free cash flow | 13,611,000 USD | 2025 | computed | | Net margin | -4.22% | 2025 | computed | | Operating margin | -4.97% | 2025 | computed | | Revenue YoY | -1.86% | 2025 | computed | | ROE | -9.25% | 2025 | computed | Computed values are grepcent-computed from the verified facts above and may differ from ratios the company itself reports. Free cash flow = operating cash flow − capital expenditures. Net margin = net income ÷ revenue. Operating margin = operating income ÷ revenue. Revenue YoY = FY2025 revenue ÷ FY2024 revenue − 1 (consecutive fiscal years only). ROE = net income ÷ period-end stockholders' equity. No market price, no rating, no forecast on this site. Not investment advice. ### Peer percentile fingerprint | Ratio | HNST | Peer median | Percentile | N | | --- | ---: | ---: | ---: | ---: | | Net margin | -4.2% | 1.2% | 18 | 12 | | Operating margin | -5.0% | 1.7% | 18 | 12 | | Revenue growth | -1.9% | 6.5% | 27 | 12 | | FCF margin | 3.7% | 3.5% | 55 | 12 | | ROE | -9.2% | 9.5% | 30 | 11 | | ROA | -7.0% | 1.5% | 27 | 12 | | Liabilities / equity | 0.33 | 1.48 | 0 | 11 | | Current ratio | 3.98 | 1.21 | 100 | 12 | Percentile = share of the N covered peers reporting that ratio whose value is lower (ties counted half); computed among grepcent-covered companies in SIC industry 5961 Retail-Catalog & Mail-Order Houses, not the whole market. A higher percentile means a higher value of the ratio, not a better company. Ratios with fewer than 8 reporting peers are omitted. Latest reported values per company; fiscal periods may differ. Descriptive arithmetic - not a score, rating, or ranking. ## Selected Fundamentals | Metric | Value | Unit | FY | Filed | | --- | ---: | --- | ---: | --- | | Revenue | 371317000 | USD | 2025 | 2026-02-25 | | Net income | -15686000 | USD | 2025 | 2026-02-25 | | Assets | 225407000 | USD | 2025 | 2026-02-25 | ## Financials Annual standardized facts from SEC companyfacts as of latest extracted filing date 2026-02-25. Source: https://data.sec.gov/api/xbrl/companyfacts/CIK0001530979.json. Derived margins, ratios, and free cash flow are computed from the extracted annual SEC facts. | Metric | 2018 | 2019 | 2020 | 2021 | 2022 | 2023 | 2024 | 2025 | | --- | ---: | ---: | ---: | ---: | ---: | ---: | ---: | ---: | | Revenue | | 235,587,000 | 300,522,000 | 318,639,000 | 313,651,000 | 344,365,000 | 378,340,000 | 371,317,000 | | Net income | | -31,083,000 | -14,466,000 | -38,679,000 | -49,019,000 | -39,238,000 | -6,124,000 | -15,686,000 | | Operating income | | -31,457,000 | -13,540,000 | -36,826,000 | -49,780,000 | -38,909,000 | -6,331,000 | -18,461,000 | | Gross profit | | 75,854,000 | 107,896,000 | 109,172,000 | 92,315,000 | 100,532,000 | 144,657,000 | 123,755,000 | | Diluted EPS | | -0.92 | -0.43 | -0.43 | -0.53 | -0.42 | -0.06 | -0.14 | | Operating cash flow | | -19,992,000 | -12,066,000 | -38,154,000 | -76,275,000 | 19,353,000 | 1,541,000 | 15,121,000 | | Capital expenditures | | 661,000 | 200,000 | 220,000 | 1,617,000 | 1,838,000 | 530,000 | 1,510,000 | | Assets | | | 240,732,000 | 272,597,000 | 240,599,000 | 201,621,000 | 247,393,000 | 225,407,000 | | Liabilities | | | 101,153,000 | 93,491,000 | 94,239,000 | 78,482,000 | 73,086,000 | 55,738,000 | | Stockholders' equity | -208,409,000 | -230,277,000 | -236,825,000 | 179,106,000 | 146,360,000 | 123,139,000 | 174,307,000 | 169,669,000 | | Cash and cash equivalents | | 13,543,000 | 29,259,000 | 50,791,000 | 9,517,000 | 32,827,000 | 75,435,000 | 89,581,000 | | Free cash flow | | -20,653,000 | -12,266,000 | -38,374,000 | -77,892,000 | 17,515,000 | 1,011,000 | 13,611,000 | ### Ratios ROE and ROA use period-end equity/assets. Liabilities / equity uses total liabilities divided by stockholders' equity. Current ratio uses current assets divided by current liabilities when both are reported. | Metric | 2018 | 2019 | 2020 | 2021 | 2022 | 2023 | 2024 | 2025 | | --- | ---: | ---: | ---: | ---: | ---: | ---: | ---: | ---: | | Net margin | | -13.19% | -4.81% | -12.14% | -15.63% | -11.39% | -1.62% | -4.22% | | Operating margin | | -13.35% | -4.51% | -11.56% | -15.87% | -11.30% | -1.67% | -4.97% | | Return on equity | | | | -21.60% | -33.49% | -31.86% | -3.51% | -9.25% | | Return on assets | | | -6.01% | -14.19% | -20.37% | -19.46% | -2.48% | -6.96% | | Liabilities / equity | | | | 0.52 | 0.64 | 0.64 | 0.42 | 0.33 | | Current ratio | | | 3.21 | 4.41 | 2.97 | 2.78 | 3.57 | 3.98 | ## As-reported value updates No tracked differences above grepcent's stated thresholds and capped precision rule were found between the earliest XBRL-filed value and the value currently on file for the standardized annual metrics grepcent tracks. ## Quarterly Quarterly standardized facts from SEC companyfacts as of latest extracted filing date 2026-08-05. Source: https://data.sec.gov/api/xbrl/companyfacts/CIK0001530979.json. Flow metrics use discrete quarter-length periods from 10-Q/10-Q/A filings. Q4 revenue and net income are derived only when annual FY and nine-month YTD facts exist for the same fiscal year; derived Q4 values are labeled. EPS Q4 is not derived. | Quarter | End date | Revenue | Net income | Diluted EPS | Method | | --- | --- | ---: | ---: | ---: | --- | | 2022-Q3 | 2022-09-30 | | | -0.13 | reported discrete quarter | | 2023-Q1 | 2023-03-31 | | | -0.20 | reported discrete quarter | | 2023-Q2 | 2023-06-30 | | | -0.14 | reported discrete quarter | | 2023-Q3 | 2023-09-30 | 86,169,000 | -8,098,000 | -0.09 | reported discrete quarter | | 2023-Q4 | 2023-12-31 | 90,264,000 | 1,143,000 | | derived Q4 = FY annual - nine-month YTD | | 2024-Q1 | 2024-03-31 | 86,217,000 | -1,403,000 | -0.01 | reported discrete quarter | | 2024-Q2 | 2024-06-30 | 93,049,000 | -4,077,000 | -0.04 | reported discrete quarter | | 2024-Q3 | 2024-09-30 | 99,237,000 | 165,000 | 0.00 | reported discrete quarter | | 2024-Q4 | 2024-12-31 | 99,837,000 | -810,000 | | derived Q4 = FY annual - nine-month YTD | | 2025-Q1 | 2025-03-31 | 97,250,000 | 3,254,000 | 0.03 | reported discrete quarter | | 2025-Q2 | 2025-06-30 | 93,459,000 | 3,870,000 | 0.03 | reported discrete quarter | | 2025-Q3 | 2025-09-30 | 92,571,000 | 758,000 | 0.01 | reported discrete quarter | | 2025-Q4 | 2025-12-31 | 88,037,000 | -23,569,000 | | derived Q4 = FY annual - nine-month YTD | | 2026-Q1 | 2026-03-31 | 78,099,000 | -42,000 | 0.00 | reported discrete quarter | | 2026-Q2 | 2026-06-30 | 83,303,000 | 10,687,000 | 0.09 | reported discrete quarter | ## Filed narrative (10-K & 10-Q) ## Business Verbatim Item 1 Business section from HNST's latest 10-K: [/company/HNST/business/](/company/HNST/business/). ## Risk Factors Verbatim Item 1A Risk Factors from HNST's latest 10-K: [/company/HNST/risk-factors/](/company/HNST/risk-factors/). ## Latest quarter (10-Q) Latest 10-Q source: https://www.sec.gov/Archives/edgar/data/1530979/000162828026053323/hnst-20260630.htm Extracted structurally from real Item 2 body heading to real Item 3/4 boundary. Confidence: high Filing date: 2026-08-05 Report date: 2026-06-30 Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations. You should read the following discussion and analysis of our financial condition and results of operations together with our condensed consolidated financial statements and related notes included elsewhere in this Quarterly Report on Form 10-Q, as well as our audited consolidated financial statements and related notes as disclosed in our Annual Report on Form 10-K for the fiscal year ended December 31, 2025 (the “Annual Report”), filed with the Securities and Exchange Commission (“SEC”) on February 25, 2026. This discussion, particularly information with respect to our future results of operations or financial condition, business strategy and plans, and objectives of management for future operations, includes forward-looking statements that involve risks and uncertainties as described under the heading “Special Note Regarding Forward-Looking Statements” in this Quarterly Report on Form 10-Q. You should review the disclosure under the heading “Risk Factors” in this Quarterly Report on Form 10-Q as well as in the Annual Report for a discussion of important factors that could cause our actual results to differ materially from those anticipated in these forward-looking statements. Unless the context otherwise requires, all references in this Quarterly Report on Form 10-Q to “we,” “us,” “our,” “our company,” “the Company” and “Honest” refer to The Honest Company, Inc. and its consolidated subsidiaries.  Overview Founded in 2012, The Honest Company (the “Company,” or “Honest,” which may also be referred to as “we,” “us” or “our”) is a personal care company dedicated to creating cleanly-formulated and sustainably-designed products for everyone from babies to adults. By combining thoughtful design with science-based innovation, we deliver personal care products for everyone from babies to adults, spanning categories across wipes, personal care, diapers, and beauty. Our commitment to our core values, continual innovation and engaging our community has differentiated and elevated our brand and our products. Since our launch, we have cultivated deep trust around what matters most to our consumers: their health, their families and their homes. We seek to meet consumers wherever they want to shop, balancing deep consumer connection with broad convenience and availability. We believe our distribution strategy positions us for continued growth through our trusted brand and award-winning multi-category product offerings. The Honest Standard, the Company’s rigorous set of guiding principles that shape every step of product innovation and development, reflects Honest’s ongoing dedication to safety, transparency and integrity. As a leader in clean and sustainable products, Honest continues to set a new standard for clean formulations, bringing joy to a community that seeks authenticity, transparency and efficacy in everyday essentials. Honest products are available nationwide at major retailers, including Amazon, Target and Walmart. Effective December 31, 2025, we have transitioned away from Honest.com as a shipping and fulfillment channel, while maintaining Honest.com as a resource for educating consumers, showcasing our complete product portfolio, and driving consumers to purchase through our leading retailers and their websites, and third-party ecommerce sites. Transformation 2.0: Powering Honest Growth In October 2025, our Board of Directors approved Transformation 2.0: Powering Honest Growth (“Powering Honest Growth”), which builds upon our original Transformation Pillars of Brand Maximization, Margin Enhancement and Operating Discipline. Powering Honest Growth is aimed at driving growth, improving simplicity, focus and profitability, which includes exiting certain lower margin, non-strategic categories and channels, including Honest.com fulfillment and the apparel category as a seller of merchandise, as well as retail and online stores in Canada, optimizing our cost structure by rightsizing selling, general and administrative expenses and implementing supply chain efficiencies. Powering Honest Growth is projected to result in the following: 18 •Costs associated with Powering Honest Growth, including restructuring costs, are expected to be approximately $28.0 million to $31.0 million to be recognized through the first quarter of 2027. Of this range, we expect approximately $5.0 million to $6.0 million to be related to restructuring costs, primarily comprising contractual and external obligation costs, employee and personnel-related costs and asset and other restructuring-related costs, and approximately $23.0 million to $25.0 million to be related to other costs included in cost of revenue, primarily related to a discrete inventory write-down related to exiting apparel category as a seller of merchandise, fixed asset impairments, and costs associated with a warehouse closure, some of which have already been incurred. ◦During the three and six months ended June 30, 2026, we have recognized $1.0 million and $2.3 million, respectively, of costs related to Powering Honest Growth, for a total of approximately $26.3 million recognized to date. See table below for additional details of the costs recognized in the three and six months ended June 30, 2026. •Powering Honest Growth is expected to result in annualized benefits in the range of approximately $14.0 million to $17.0 million, and the Company has begun seeing benefits in 2026. These benefits include reduction in costs of revenue and reduction in operating expenses, offset by a decrease in revenue related to the exit of lower margin non-strategic portfolios. •The cash impact of costs related to Powering Honest Growth is expected to be in the range of approximately $10.0 million to $13.0 million for the full years 2026 and 2027, with $6.5 million cash paid through the first half of 2026 and the remainder to be paid in the second half of 2026 and in 2027. •We expect the restructuring element of Powering Honest Growth to be substantially completed by December 31, 2026. We may incur other costs or cash expenditures not currently contemplated as a result of or in connection with Powering Honest Growth. We expect to continue driving benefits from the three Transformation Pillars of Brand Maximization, Margin Enhancement, and Operating Discipline: 1) Brand Maximization •Leveraging the strength of the Honest brand to drive growth through greater availability, expanded household penetration, product innovation, margin-accretive products, and marketing effectiveness. •Pricing strategy as a driver of revenue is also a component of Brand Maximization. 2) Margin Enhancement •Focusing our resources on the United States, which included the exit of our low-margin products in Europe and Asia in 2023 and, most recently, Canada in 2025. •Exiting low-margin elements of cleaning and sanitization products in 2023 and apparel in 2025. •Executing an inventory, or stock-keeping unit (“SKU”), rationalization program in 2023. •Re-directing resources to accelerate cost savings, including optimization of our contract manufacturing strategies, optimization of our supply chain footprint and inventory management, along with leveraging technology to improve systems, reduced shipping and logistic costs, and product costs. •Realigning resources to reflect the prioritization of higher-margin opportunities, including strategic shift away from our lower margin channels, including exiting our direct-to-consumer (“DTC”) channel in 2025. 3) Operating Discipline •Focusing on improving our executional excellence in how we operate as an enterprise. •Building a culture that emphasizes returns across growth drivers, including marketing, trade promotion, and innovation. •Managing working capital including the reduction of inventory. •Rightsizing selling and general and administrative costs.     Costs associated with Powering Honest Growth were as follows (in thousands): [[GREPCENT_TABLE]] [["","","Three Months Ended June 30, 2026","","Six Months Ended June 30, 2026"],["Cost of Revenue(1)","","$","1,390","","","$","2,076"],["Restructuring Costs(2)","","(383)","","","223"],["Total","","$","1,007","","","$","2,299"]] [[/GREPCENT_TABLE]] ______________ (1) Represents costs in connection with a warehouse closure which is included in cost of revenue on the condensed consolidated statements of comprehensive income. 19 (2) Includes an adjustment related to contract and external obligation costs for the three months ended June 30, 2026. For further details on the restructuring element of Powering Honest Growth, refer to Note 12, “Restructuring” included in our condensed consolidated financial statements included elsewhere in this Quarterly Report on Form 10-Q. Key Factors Affecting Our Performance We believe that the growth of our business and our future success are dependent on many factors. While each of these factors presents significant opportunities for us, they also pose important challenges that we must successfully address to enable us to sustain the growth of our business and improve our operations while staying true to our mission, including those discussed below and in the section titled “Risk Factors” in this Quarterly Report on Form 10-Q and in our Annual Report. Operational and Marketing Efficiency To grow our business, we intend to continue to improve our operational and marketing efficiency, which includes attracting new consumers, increasing community engagement and connection with our brand, and improving fulfillment and distribution operations. Our marketing model is inclusive of a best-in-class modern approach across paid, owned, and earned marketing channels. We invest significant resources in marketing and content generation, use a variety of brand and performance marketing channels and work continuously to improve brand exposure at our retail customers to acquire new consumers. It is important to maintain reasonable costs for these marketing efforts relative to the revenue we expect to derive from our consumers. We leverage proprietary consumer insights and best-in-class analytics to guide our distribution strategy and inform our marketing spend optimization. Our future success depends in part on our ability to effectively attract consumers on a cost-efficient basis and achieve efficiencies in our operations. In addition, we believe we have been able to achieve some operational and marketing efficiency as part of cost savings in connection with our Brand Maximization Transformation Pillar. Ability to Execute Increasing Physical and Digital Availability The core of our growth strategy centers around increasing physical availability through expanded stores, doors, aisles, shelves and facings and increasing digital availability of our products in retail customers websites, and third-party ecommerce sites. While we have made significant progress in our distribution gains, we are still under indexed compared to competition. Our partnerships with leading third-party retail platforms and national retailers have broadened our consumer reach, raised our brand awareness and enhanced our margins through operating leverage. We will continue to pursue partnerships with a wide variety of retailers, including mass retailers, online retailers, club retailers, grocery stores, drugstores and specialty retailers. Our ability to execute this strategy will depend on a number of factors, such as competitive dynamics and retailers’ satisfaction with the sales and profitability of our products, channel shifts of their customers, and their own supply chain, order timing, and inventory needs, which may fluctuate from period to period. For example, we experienced distribution losses with two of our largest customers on certain diaper SKUs mainly related to these retailers' footprint changes for certain product categories overall and a shift to more exclusive n [Excerpt truncated for page length; source filing is linked above.] ## Latest 10-K MD&A (excerpt) Latest 10-K Item 7 source: https://www.sec.gov/Archives/edgar/data/1530979/000162828026011634/hnst-20251231.htm Complete FY 2025 MD&A: /company/HNST/mda/fy2025/ Extracted structurally from real Item 7 body heading to real Item 7A/8 boundary. Confidence: high Filing date: 2026-02-25 Report date: 2025-12-31 Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations You should read the following discussion and analysis of our financial condition and results of operations together with our consolidated financial statements and related notes included elsewhere in this Annual Report on Form 10-K. This discussion, particularly information with respect to our future results of operations or financial condition, business strategy and plans, and objectives of management for future operations, includes forward-looking statements that involve risks and uncertainties as described under the heading “Special Note Regarding Forward-Looking Statements” in this Annual Report on Form 10-K. You should review the disclosure under the heading “Risk Factors” in this Annual Report on Form 10-K for a discussion of important factors that could cause our actual results to differ materially from those anticipated in these forward-looking statements. Unless the context otherwise requires, all references in this Annual Report on Form 10-K to “we,” “us,” “our,” “our company,” "the Company" and “Honest” refer to The Honest Company, Inc. and its consolidated subsidiaries. A discussion regarding our financial condition and results of operations for the year ended December 31, 2025 compared to the year ended December 31, 2024 is presented below. A discussion regarding our financial condition and results of operations for the year ended December 31, 2024 compared to the year ended December 31, 2023 can be found in Item 7. “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our Annual Report on Form 10-K for the year ended December 31, 2024 filed with the Securities and Exchange Commission (“SEC”) on February 26, 2025.  Overview Founded in 2012, The Honest Company (the “Company,” or “Honest,” or which may also be referred to as “we,” “us” or “our”) is a personal care company dedicated to creating cleanly-formulated and sustainably-designed products for everyone from babies to adults. By combining thoughtful design with science-based innovation, we deliver personal care products for everyone from babies to adults, spanning categories across wipes, personal care, diapers, and beauty. Our commitment to our core values, continual innovation and engaging our community has differentiated and elevated our brand and our products. Since our launch, we have cultivated deep trust around what matters most to our consumers: their health, their families and their homes. We seek to meet consumers wherever they want to shop, balancing deep consumer connection with broad convenience and availability. We believe our distribution strategy positions us for continued growth through our trusted brand and award-winning multi-category product offering. The Honest Standard, the Company’s rigorous set of guiding principles that shape every step of product innovation and development, reflects Honest’s ongoing dedication to safety, transparency and integrity. As a leader in clean and sustainable products, Honest continues to set a new standard for clean formulations, bringing joy to a community that seeks authenticity, transparency and efficacy in everyday essentials. Honest products are available nationwide at major retailers, including Amazon, Target and Walmart. Effective December 31, 2025, we have transitioned away from Honest.com as a shipping and fulfillment channel, while maintaining Honest.com as a resource for educating consumers, showcasing our complete product portfolio, and driving consumers to purchase through our leading retailers and their websites, and third-party ecommerce sites. Transformation 2.0: Powering Honest Growth In 2023, we executed a broad-based Transformation Initiative designed to build the Honest brand and drive growth in higher-margin areas of the portfolio, strengthen our cost structure, drive focus on the most productive areas of our business, deliver greater impact from brand-building investments, and improve executional excellence across the enterprise. The restructuring element of the Transformation Initiative was substantially completed by December 31, 2023. In October 2025, our Board of Directors approved Transformation 2.0: Powering Honest Growth ("Powering Honest Growth") which builds upon our original Transformation Pillars of Brand Maximization, Margin Enhancement and Operating Discipline. Powering Honest Growth is aimed at improving simplicity, focus and profitability, which includes exiting certain lower margin, non-strategic categories and channels, including exiting Honest.com fulfillment and apparel, as well as exiting retail and online stores in Canada, optimizing our cost structure by rightsizing selling, general and administrative expenses and implementing supply chain efficiencies. Powering Honest Growth is projected to result in the following: •Costs associated with Powering Honest Growth, including restructuring costs, are expected to be approximately $30.0 million to $35.0 million to be recognized through the first quarter of 2027. During the year ended December 31, 2025, we have recognized $24.0 million of total costs related to Powering Honest Growth. See table below for additional details of total costs. ◦Of this range, we expect approximately $5.0 million to $8.0 million to be related to restructuring costs, primarily comprising contractual and external obligation costs, employee and personnel-related costs and asset and other restructuring-related costs, and approximately $25.0 million to $27.0 million to be related to other costs included in cost of revenue, primarily related to a discrete inventory write-down related to exiting apparel, fixed asset impairments, and costs associated with the warehouse closure, some of which 49 have already been incurred. For the year ended December 31, 2025, we have recognized $4.2 million in restructuring costs and $19.8 million in cost of revenue included on the consolidated statements of comprehensive loss. •Powering Honest Growth is expected to result in annualized benefits in the range of approximately $10.0 million to $15.0 million, and the Company expects to begin seeing benefits in 2026. These benefits include reduction in costs of revenue and reduction in operating expenses, offset by a decrease in revenue related to the exit of lower margin non-strategic portfolios. •The cash impact of costs related to Powering Honest Growth is expected to be in the range of approximately $15.0 million to $20.0 million for the full year 2026, with an immaterial amount of costs incurred during the year ended December 31, 2025 and the remainder to be incurred in 2026 and 2027. •We expect the restructuring element of Powering Honest Growth to be substantially completed by December 31, 2026. We may incur other costs or cash expenditures not currently contemplated as a result of or in connection with Powering Honest Growth. We expect to continue driving benefits from the three Transformation Pillars of Brand Maximization, Margin Enhancement, and Operating Discipline: 1) Brand Maximization •Leveraging the strength of the Honest brand to drive growth through greater availability, expanded household penetration, product innovation, margin-accretive products, and marketing effectiveness. •Pricing strategy as a driver of revenue is also a component of Brand Maximization. 2) Margin Enhancement •Focusing our resources on the United States, which included the exit of our low-margin products in Europe and Asia in 2023 and, most recently, Canada in 2025. •Exiting low-margin elements of cleaning and sanitization products in 2023 and apparel in 2025. •Executing an inventory, or stock-keeping unit (“SKU”), rationalization program in 2023. •Re-directing resources to accelerate cost savings, including optimization of our contract manufacturing strategies, optimization of our supply chain footprint and inventory management, along with leveraging technology to improve systems, reduced shipping and logistic costs, and product costs. •Realigning resources to reflect the prioritization of higher-margin opportunities, including strategic shift away from our lower margin channels, including exiting our direct-to-consumer (“DTC”) channel in 2025. 3) Operating Discipline •Focusing on improving our executional excellence in how we operate as an enterprise. •Building a culture that emphasizes returns across growth drivers, including marketing, trade promotion, and innovation. •Managing working capital including the reduction of inventory. •Rightsizing selling and general and administrative costs.     Costs associated with Powering Honest Growth for the year ended December 31, 2025 were as follows (in thousands): [[GREPCENT_TABLE]] [["","","For the year ended December 31, 2025"],["Cost of Revenue(1)","","$","19,837"],["Restructuring Costs(2)","","4,159"],["Total","","$","23,996"]] [[/GREPCENT_TABLE]] ______________ (1) Cost of revenue includes discrete inventory write-downs of $15.9 million related to the exit of apparel, machinery and equipment write-offs of $2.5 million, apparel purchase commitments of $1.1 million and accelerated depreciation of $0.4 million for the year ended December 31, 2025. (2) Refer to the restructuring table under "Results of Operations" below for further details of operating expenses included in restructuring costs on the consolidated statements of comprehensive loss. For further details on the restructuring element of Powering Honest Growth, refer to Note 15, “Restructuring” included in our consolidated financial statements included elsewhere in this Annual Report on Form 10-K. Key Factors Affecting Our Performance We believe that the growth of our business and our future success are dependent on many factors. While each of these factors presents significant opportunities for us, they also pose important challenges that we must successfully address to enable 50 us to sustain the growth of our business and improve our operations while staying true to our mission, including those discussed below and in the section of this Annual Report on Form 10-K titled “Item 1A. Risk Factors.” Operational and Marketing Efficiency To grow our business, we intend to continue to improve our operational and marketing efficiency, which includes attracting new consumers, increasing community engagement and connection with our brand, and improving fulfillment and distribution operations. Our marketing model is inclusive of a best-in-class modern approach across paid, owned, and earned marketing channels. We invest significant resources in marketing and content generation, use a variety of brand and performance marketing channels and work continuously to improve brand exposure at our retail customers to acquire new consumers. It is important to maintain reasonable costs for these marketing efforts relative to the revenue we expect to derive from our consumers. We leverage proprietary consumer insights and best-in-class analytics to guide our distribution strategy and inform our marketing spend optimization. Our future success depends in part on our ability to effectively attract consumers on a cost-efficient basis and achieve efficiencies in our operations. In addition, we believe we have been able to achieve some operational and marketing efficiency as part of cost savings in connection with our Brand Maximization Transformation Pillar. Ability to Execute Increasing Physical and Digital Availability The core of our growth strategy centers around increasing physical and digital availability of our products through expanded stores, doors, aisles, shelves and facings. While we have made significant progress in our distribution gains, we are still under indexed compared to competition. Our partnerships with leading third-party retail platforms and national retailers have broadened our consumer reach, raised our brand awareness and enhanced our margins through [Excerpt truncated for page length; the complete text is on the linked full-MD&A page.] Read the full FY 2025 MD&A: /company/HNST/mda/fy2025/ All MD&A years: /company/HNST/mda/ ## MD&A history Prior-year 10-K MD&A spans are extracted from SEC filings with the same bounded parser used for the latest filing. Each year's full verbatim text is on its own sub-page. - [FY 2024 MD&A](/company/HNST/mda/fy2024/): filed 2025-02-26; accession 0001530979-25-000016 (https://www.sec.gov/Archives/edgar/data/1530979/000153097925000016/hnst-20241231.htm) - [FY 2023 MD&A](/company/HNST/mda/fy2023/): filed 2024-03-08; accession 0001530979-24-000028 (https://www.sec.gov/Archives/edgar/data/1530979/000153097924000028/hnst-20231231.htm) - [FY 2022 MD&A](/company/HNST/mda/fy2022/): filed 2023-03-16; accession 0001530979-23-000038 (https://www.sec.gov/Archives/edgar/data/1530979/000153097923000038/hnst-20221231.htm) - [FY 2021 MD&A](/company/HNST/mda/fy2021/): filed 2022-03-28; accession 0001530979-22-000024 (https://www.sec.gov/Archives/edgar/data/1530979/000153097922000024/hnst-20211231.htm) ## Macro cross-references Indicators mapped to this company's SIC classification (industry 5961 Retail-Catalog & Mail-Order Houses) by grepcent's deterministic macro-sector crosswalk. A navigational mapping, not a statistical or causal claim. - [RSAFS](/indicator/RSAFS/): Advance Retail Sales: Retail Trade - [PCE](/indicator/PCE/): Personal Consumption Expenditures - [DSPIC96](/indicator/DSPIC96/): Real Disposable Personal Income - [PSAVERT](/indicator/PSAVERT/): Personal Saving Rate Macro-to-micro threads including this sector: [Inflation (CPI / PCE / PPI)](/thread/inflation-cpi-pce-ppi/), [US labor market](/thread/us-labor-market/), [Growth & output](/thread/growth-output/), [Sector employment](/thread/sector-employment/), [Industrial orders & inventories](/thread/industrial-orders/), [Trade & external](/thread/trade-external/). All macro indicators: /indicators/ ## For LLMs & downloads Markdown twin: /company/HNST.md · JSON record: /company/HNST.json · verified financials: /company/HNST/financials.json / /company/HNST/financials.csv · machine TOC for the whole site: /llms.txt