Let’s Be Honest…

HUGE BLACK FRIDAY SALE COMING FOR MY JOINING MY PRIVATE STOCK GROUP! Link to get notification as soon as deal drops!

Well let’s be honest tell me what song that is the honest company yes they did report earnings hey you know what some companies when they say they’re gonna report earnings sometimes they do and the honest company has okay we gotta look at these numbers i’m gonna share my perspective on this i’m going to share with you if i’m buying this stock tomorrow and if i am

Buying the stock tomorrow what price am i looking at for this one okay uh yeah these earnings they were something else that’s all i’m gonna say about that okay uh obviously wall street’s taking this these earnings as a very very positive the stock is up over seven percent after hours here for the honest company all right guys so let’s get straight into the numbers

Here so honest company reports third quarter 2021 financial results eighth consecutive quarter of year-over-year revenue and volume growth revenue grew six percent as compared to third quarter 2020 and 47 as compared with third quarter of 2019 diapers wipes skin and personal care combined for revenue growth of 20 percent compared to the third quarter 2020 okay so

That’s all you’re looking at like definitely good good earnings okay the honest company hnst a digitally native mission driven brand focus leading clean lifestyle and move it when you hear all those words just understand the millennials love it okay and the next generation’s gonna love this company even more we you know you just throw enough of those catchy words

In there man you’re doing well for yourself that’s all sorry about that uh but needless to say the third quarter reflects honest strategic investments in its core product categories across diapers wipes skin personal care with both categories experiencing revenue growth compared to the third quarter 2020 and 2019 quote the progress and underlying strength of our

Business reflects a continued success of our strategic initiatives this past quarter’s results reflect solid execution by our team delivering growth increasing market share accelerating household penetration i love it when they increase the penetration and adding incremental omni-channel distribution said nick vlajos the ceo of honest as our entire industry has

Faced a dynamic operating environment with significant inflationary pressure and supply chain challenges our solid revenues and gross margin performance continues to show strength of our business as we look to the future we remain confident in our strategic plan and our focus on executing it with the excellence of delivering long-term shareholder value to further

Solidify honest position with the next generation in a modern cpg company okay boom yes very very exciting here let’s look at the uh some of the the highlights here revenue growth is six percent third quarter 2020 right those businesses grew 20 we’re going to look into detail in just a moment here okay i like to look at the big the big overarching numbers and then

We’ll get into the details gross profit at 29.8 mill which is basically a gross margin of 36 reflecting strong demand for our product offerings and efficiencies so basically as the business gets bigger you know what happens they usually bring down the cost of making products they just find what better ways to do things as a company gets more and more mature they

Scale their business this is what great companies do expanded retail distribution to over 40 000 retail locations in the third quarter 2021 an increase of 10 percent as compared to the third quarter of 2020 more good news there introduce consumer-centric new marketing including our lavender nighttime campaign in support for our beauty restage that highlighted the

See also  Turkey's Unravelling Economy.

Breadth of our skin and personal care line which is another huge business that i think is going to boom for the in the future for this company increased household penetration of 3.5 percent a 10 increase as compared with the third quarter of 2020 more good news there okay now let’s start looking at the nitty-gritty details this is when things get fun for me and

Really start breaking the stuff down okay so first thing i want to look at here comparing this this company through 2020 right the diapers and wipes business is up quite substantially there from 46 mil to 53 mil skin and personal care also up but this one’s up even a much bigger percentage here from about 19 mil right to now we’re talking 25 mil plus for skin and

Personal care now the household and wellness down substantially from almost 12 million dollars in 2020 to 3.4 why is that well last year at this time everybody was buying anything soap related sanitizer related from any company that sold sanitizer soap products and honest is a company that also sells soap and sanitized products well everybody doesn’t care about

That anymore okay no one needs any more dang sanitizer and uh you know that’s just like no one needs that anymore okay so essentially like yeah you know that that they had a huge ramp up in business right from 3.7 mil to 11.8 mil that was a one-off freak event when you’re in a once in a hundred year health event and everybody’s freaking out and like i gotta get

Sanitized right here’s soap it benefited honest for the one year and now that that business is completely gone as far as that goes now they will in my opinion grow that business over the coming years it’s just yeah it’s going to take them a while to ever get that particular segment of their business back to where it used to be okay now if we look at more in depth

Of these numbers 2021 versus 2020 change diapers and wipes business is up 16 year over year that’s huge and remember i think there’s going to be a bigger trend that’s a multi-year trend that’s going to benefit on us in a massive massive way skin and personal care over 20 or basically 28 positive change year over year so basically their core business is great right

They had the the freak uh situation last year that helped their obviously household wellness i think sanitizer and soap business but that was just a one-off free thing the diapers wipes skin personal care businesses are extremely healthy and this is extremely good news for this company even bigger here look at this this is showing you 2021 versus 2019 right look at

These numbers guys up 38 on a two-year stack right 38 for diapers and wipes on a two-year stack 85 percent growth in skin and personal care those are those are unbelievably impressive numbers there’s no way you can look at those numbers and not be anything but extremely impressed by the way this brand is growing with the more retailers are getting into the more

Distribution they’re getting into and the more relevant this company is to households than ever before and the household penetration i think for this company long term is going to go to 10 to 20 percent for this company over the coming years they’re 3.5 right now okay they have a long way to go as far as that let’s look at some of the more of these uh you know

See also  Aurora Cannabis (NYSE: ACB) receives Final regulatory approval & Completes acquisition of ICC Labs

Numbers in detail here okay so if we look at 2021 versus 2020 digital versus retail right we’re going to see the digital business is down eleven percent because once again last year was a once in a hundred year health event so everybody was ordering a bunch of stuff online but look at how much the retail side has risen 28 so net net you got a six percent total rise

In revenues there which is very very strong especially when you had this massive headwind against you essentially which was last year everybody buying this the sanitizing and soap products and that business was being bye-bye okay so these numbers are incredibly impressive you look at the 2021 versus 2019 change i mean total revenue is up 47 on a two-year stack

That’s incredibly impressive guys these numbers are extraordinary this shows you the management team at this company is is performing that’s all i’ll say about that there’s no way you can look at these numbers and and be anything but extremely impressed and everybody knew the sanitizer business was going to fall off right that’s just it was a one-year benefit

It was a massive benefit to the company it helped them out but it was a one-year thing now imagine 2022 comps because 2022 comes they come up against 2021. so this whole sanitized situation where their business boom because of sanitizer and soap products that’s going to be a thing of a past right because basically by the time we got into early 2021 like that

Was already a thing of the past right and so now this is going to be so much easier of a year to comp against right it’s going to be so much easier for the company to comp against 2021 numbers than it was 20 20 numbers okay so needless to say i’m very very happy now if we go ahead and look a little more nitty-gritty let’s look at the balance sheet okay balance

Sheet you’re looking at cash to cash equivalents of 27.6 million dollars for this company look at the short-term investments over 62 million dollars in short-term investments okay look at total current assets 213 mil of total current assets that’s versus 49 million dollars of of basically total current liabilities a substantial change i mean that’s just you know

Incredible the difference is just a flat out phenomenal okay total assets are 274 million dollars versus 94 million dollars in total liabilities so we’re looking at revenue that’s incredibly impressive we’re looking at everything across the board is an incredibly impressive income statement wise right and then we’re looking at this balance sheet which is absolutely

Phenomenal and we’re getting a stock that is heavily heavily discounted and i am uh very very excited about this one especially being that uh they’re a company that regardless of of you know whether it’s boom times or bad times it’s a company that’s going to be absolutely very very successful okay the leadership at this company remember this is no this is a no joke

As holy smokes leadership team okay if you didn’t know jessica alba’s actually not even really technically part of the leadership team although she’s very important to the company and kind of the vision and i think she’s brilliant from a marketing perspective and i think it’s great to still have her attach the brand i love that okay but the management team’s their

See also  Why not Penny Stocks | BeatTheBush

Own deal in terms of making the the day-to-day decision and nick vlahos has done nothing but a phenomenal job turning this company around the company was not in the best place when he you know first joined in the first year or two and he’s done a phenomenal job of really turning this business for the better getting them out of you know some some problems they had

Because this company had a several billion dollar valuation you know many many years ago it was a fast growth company and they ran into a bunch of troubles in it kind of it was almost like 2015 2016-ish somewhere around there and the company went through a whole rough stage and nick obviously started helping the company come out of that over the coming years and

He’s just done a phenomenal job and he brought over a lot of folks from the clorox company that are just they know what they’re doing in this sort of business and they know how to get into more and more retailers they know how to get sku expansion and they know how to build a very very strong brand okay so as far as me with the the leadership team this company

Extremely thrilled and extremely happy with them okay now obviously after hours like i said the stock’s up over seven percent now am i buying the stock tomorrow all right so here’s the deal if i can get shares and i’m awake uh during that time period if i’m awake and i can get shares for less than ten dollars yes i will be buying the stock and i don’t usually buy

A stock if it goes up big on earnings but i’m just so dang happy with these earnings and i’m so thrilled with the numbers they’re putting up and the growth on a year-over-year basis and on a two-year stack it’s incredible in the way the balance sheets at and the way i see them building out this brand yeah i’ll actually be a rare buyer if the stock is up tomorrow

And i don’t usually do that if you guys know like i like to buy it when it’s going down right now when it’s going up but yeah if i can get shares under 10 and i’m awake tomorrow i will get those shares okay now if the stock is uh 10.50 i’ll consider i’ll consider buying more shares of the stock uh the hard thing for me is i’ve been buying a whole lot of shares at

Eight nine so i’ve also have to pay 10 10 plus but then the day i look at the stock it’s a it’s a you know a 20 plus dollar stock a few years from now if not a 30 plus dollar stock um and so i’m kind of looking at it and i’m like it’s fairly easy money with very very low risk because i feel like in a recession environment it’s an extremely low risk and so for those

Reasons it’s actually rather rather attractive so i will likely be buying the honest company so let’s be honest she likes me she likes me what song is that okay anyways guys hope you enjoyed this as always extremely happy about these earnings if you didn’t know we got a massive black friday sale coming from the private stock group if you want to get notified as

Soon as that deal drops check out pin comment down there much love and have a great day

Transcribed from video
Let's Be Honest… By Financial Education

Scroll to top