The Honest Company, Inc.

ladies and gentlemen thank you for standing by and welcome to the honest company's first quarter 2024 earnings call at this time our participants are on a listen-only mode after the speaker's presentation there will be a question and answer session please be advised that today's conference is being recorded i would like to hand the conference call over to miss elizabeth bugart senior director in best relations at the honest company please go ahead

Good afternoon, everyone. Thank you for joining our first quarter 2024 conference call. Joining me today are Carla Vernon, our chief executive officer, and Dave Loretta, our chief financial officer. Before we start, I would like to remind you that we will make certain statements today that are forward-looking within the meaning of the federal securities laws, including statements about the outlook of our business and other matters referenced in our earnings release issued today. These forward-looking statements involve a number of risks and uncertainties that could cause actual results to differ materially. Please refer to our earnings release issued today as well as our SEC filings for a more detailed description of the risk factors that may affect our results. Please also note that these forward-looking statements reflect our opinions only as of the date of this call, and we undertake no obligation to revise or publicly release the results of any revision to these forward-looking statements in light of new information or future events, except as required by law. Also, during this call, we will discuss non-GAAP financial measures which adjust our GAAP results to eliminate the impact of certain items. You will find additional information regarding these non-GAAP financial measures and a reconciliation of these non-GAAP to GAAP measures in the financial results section of today's earnings release. A live broadcast of this call is also available on the investor relations section of our website at investors.honest.com. And with that, I'll turn it over to Carla.

Thanks, Elizabeth. Good afternoon, everyone, and thank you for joining us today. As we kick off the first quarter of 2024, I'm pleased to share that we achieved another quarter of improved financial results and solid growth momentum. As you recall, during our last earnings call in March, I shared several new achievements and announcements. These included key financial milestones we achieved as a management team in 2023, a new long-range financial algorithm, and an updated strategic plan detailing our key drivers for long-term growth. We also reiterated our new operating mindset, focused on our transformation pillars. These pillars, brand maximization, margin enhancement, and operating discipline are deeply rooted in our enterprise practices, and they will remain an enduring strategic component of building a stronger financial foundation and unleashing the full potential of the honest brand. These pillars have enabled us to strengthen our business performance, our operating culture, and our financial results. This quarter's notable financial achievements include delivering a second consecutive quarter of positive adjusted EBITDA and reaching revenue growth in line with our outlook, marking our eighth consecutive quarter of positive year-over-year revenue growth. We also achieved a gross margin of 37%, which is a record high for our time as a public company and is an improvement of nearly 1,300 basis points year over year. In addition to these financial highlights, our brand continues to grow in the number of homes and people we are reaching. Our last 52-week household penetration is 6%, which is up 18 basis points year over year. As we begin on the path of executing our long-range strategic plan, our growth with new consumers and new households is delivered through a blend of increasing availability, maximizing our hero products, and delivering meaningful new product innovation. Our WIPES portfolio is emblematic of the strategic building blocks that will drive our long-range growth strategy. our wipes business grew 44% in consumption in 2023. We're pleased this growth was driven by a combination of strong performance across our core items and successful innovation launches, including flushable wipes. Our early indicators of our successful launch into flushable wipes underscore an important principle of our long-range strategic growth plan. we continue to see that the Honest brand can successfully travel across consumer age groups, usage occasions, and even parts of the home. As I look out to 2024 and beyond, I continue to remain confident in our ability to further amplify the distinctive elements of the Honest brand and meet the growing consumer demand for a higher standard of clean ingredients in baby and personal care products. With a clear vision for the future, we will continue to advance and scale Honest's trusted products and our business model through the power of our brand, our team, and our honest standard. And now, I will turn it over to Dave to share the financial details of our first quarter and outlook.