Scott+Scott Attorneys at Law LLP Reminds Investors of Securities Class Action Against The Honest Company, Inc. (NASDAQ: HNST) and November 15 Deadline

NEW YORK, Oct. 27, 2021 (GLOBE NEWSWIRE) -- Scott+Scott Attorneys at Law LLP (“Scott+Scott”), an international shareholder and consumer rights litigation firm, announces the filing of a class action lawsuit against The Honest Company, Inc. (“Honest” or the “Company”) (NASDAQ: HNST) and certain of its officers and directors, alleging violations of federal securities laws. If you purchased Honest stock and have suffered a loss, realized or unrealized, you are encouraged to contact Scott+Scott attorney Joe Pettigrew at (844) 818-6982, or at jpettigrew@scott-scott.com for more information. The deadline for lead plaintiff motions is November 15, 2021.

Honest claims it is a “digitally-native, mission-driven brand focused on leading the clean lifestyle movement, creating a community for conscious consumers and seeking to disrupt multiple consumer product categories.”

The Company held its initial public offering (“IPO”) on or about May 4, 2021, at a price of $16 per share, for proceeds of $91.1 million.

Approximately two months after the IPO, on August 13, 2021, before the market opened, Honest issued a press release titled “The Honest Company Reports Second Quarter 2021 Financial Results.” Honest 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 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 also disclosed that its Diapers and Wipes category revenue declined 2% compared to the second quarter of 2020. Honest 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 $3.98 per share, or 28%, to close at $10.07 per share on August 13, 2021. The Company’s stock price is even lower as of this writing.

The lawsuit alleges that Honest and the other defendants misled investors in the offering documents filed in connection with the IPO in 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) therefore, certain positive statements about the Company’s business, operations, and prospects were materially misleading and/or
lacked a reasonable basis.

What You Can Do

If you purchased Honest stock since May 4, 2021, and you wish to discuss this lawsuit, please contact attorney Joe Pettigrew at (844) 818-6982, or at jpettigrew@scott-scott.com.

About Scott+Scott Attorneys at Law LLP

Scott+Scott has significant experience in prosecuting major securities, antitrust, and employee retirement plan actions throughout the United States. The firm represents pension funds, foundations, individuals, and other entities worldwide with offices in New York, London, Amsterdam, Connecticut, Virginia, California, and Ohio.

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CONTACT:

Joe Pettigrew
Scott+Scott Attorneys at Law LLP
230 Park Ave, 17th Fl, New York, NY 10169
(844) 818-6982
jpettigrew@scott-scott.com