NEW YORK, NY / ACESSWIRE / October 14, 2021 / Labaton Sucharow, a nationally ranked and award-winning shareholder rights law firm, announces that a class action lawsuit has been filed on behalf of investors that purchased or otherwise acquired The Honest Company, Inc. ("Honest Company" or the "Company") (NASDAQ:HNST) securities pursuant and/or traceable to the offering documents issued in connection with Honest Company's May 2021 initial public offering (the "IPO"). Honest Company investors have until November 15, 2021, to file a lead plaintiff motion.
Approximately two months after the IPO, on August 13, 2021, Honest Company reported a net loss of $20 million for the second quarter of 2021, as compared to a net loss of only $0.4 million for the second quarter of 2020. Honest Company also disclosed that its revenue grew only 3% as compared to the second quarter of 2020, because it was negatively impacted by "an estimated $3.7 million COVID-19 stock-up impact primarily in Diapers and Wipes in the prior year period." Honest Company also disclosed that its Diapers and Wipes product category revenue declined 2% compared to the second quarter of 2020. Honest Company further disclosed that, "Household and Wellness revenue declined 6% from the second quarter of 2020 as consumer and customer demand for sanitization products decreased as consumers became vaccinated and customers managed heavy levels of inventory." On this news, the Company's stock price fell approximately 28%, damaging investors.
The complaint filed in this class action alleges that the Registration Statement was materially false and misleading and omitted that (1) prior to the IPO, the Company's results had been significantly impacted by a multimillion-dollar COVID-19 stock-up for products in the Diapers and Wipes category and Household and Wellness category; (2) at the time of the IPO, the Company was experiencing decelerating demand for such products; (3) as a result, the Company's financial results would likely be adversely impacted; and (4) as a result of the foregoing, Defendants' positive statements about the Company's business, operations, and prospects, were materially misleading and/or lacked a reasonable basis.
If you purchased Honest Company shares pursuant and/or traceable to the IPO and want to receive additional information and protect your investments free of charge, please contact David J. Schwartz using the toll-free number (800) 321-0476, via email at [email protected], or by filling out this form.
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CONTACT:
David J. Schwartz
(800) 321-0476
[email protected]
SOURCE: Labaton Sucharow LLP