Jessica Alba Backed Honest Company Relying On Walmart To Boost Its Financials - Here's Why

Digital-first consumer goods company Honest Company Inc HNST has brought in an experienced Amazon.com AMZN executive, Carla Vernón, to help wade through the choppy waters.

The company’s turnaround strategy lies heavily on another retail giant, Walmart Inc WMT.

Honest, whose shares have seen a 91% slump since its 2021 public offering, is counting on an expanded presence in Walmart to boost its revenue, reported Bloomberg.

While the company already has its diapers selling at about half of the retail giant’s stores, its baby wipes, shampoos, and body washes are expected to stacked up this summer.

Co-founded by actress Jessica Alba, the digital native company’s failure to ramp up its presence in retailers is seen as a misstep by Vernón.

“Going to Walmart is a great awareness builder for the brand,” said William Blair analyst Jon Andersen.

After taking over as the CEO, Vernón made some important changes, including eliminating the chief digital and strategy officer role and pulling the business out of Asia and Europe.

The actions seem to have paid off, as the company reported an 8% increase in second-quarter revenue this month.

With a stronger brick-and-mortar strategy in place, investors will keenly watch if the new CEO can turn around the company that has been at a net loss since its IPO. 

The move reflects how digital and direct-to-consumer brands are turning to physical retailers as e-commerce growth slows.  

Price Action: HNST shares are trading lower by 1.42% at $1.39 premarket on the last check Friday.