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• 00:00I am representing the honest company. We are a company that makes cleanly formulated and designed baby products and personal care products. So we’re right in the center store of your aisles and we have diapers and baby wipes and surface wipes and beautiful skin care for babies, but also for adults. And I’m very pleased to say that as we reported our most recent outlook, we really do feel that we have taken into account some of the dynamic nature of the economy related to tariffs in our outlook and in our plan. So at the honest company, we actually have a asset light model and we have zero debt and $75 million of cash. When we closed the quarter in the bank and our diapers are made in in Mexico. Our wipes are made in China. And we really do believe that as we’ve been planning for this time, that we’ve learned from a playbook we’ve developed over the years. So tariffs actually are not new for us at Honest. We’ve been really having a plan to mitigate and be agile during the changing tariffs environment over the past 2 to 3 years. So we step into this moment with a lot of experience about how to make sure that as we provide our guidance, we have a plan that we really do believe is set up to manage some of the the things that we know today and the dynamism. Karl, I want to ask about me kind of I’m your target market. I have two kids, you know, under the age of five and especially the last couple of years, as the market has rallied, I’ve been more willing to pay top dollar for the best products for my babies now. Now that we see the market kind of tanking and I’m like watching my 401k with trepidation, I’m starting to worry about paying a premium and you know, maybe I can go with the store brand at Costco. Are you seeing that kind of wealth effect from consumers right now? Well, Matt, I have come to learn that you like nice things. So I do appreciate that you also consider honest among those products that you like. Here’s my perspective. What we do know about consumers like your own family, is that there is an increasing incidence in childhood allergies. The reported rates of childhood allergies have nearly doubled since 1997, and the market for sensitive skin products is expected to double by 2030 to $80 billion. Those are needs that really are quite personal. I’m also a mom. My kids are teenagers. That’s a whole nother stage. I’m here for you when you get to that. But when your babies are little, you will do anything to keep them healthy, well, and comfortable. And that’s where our products come in. So the honest products have something that we call the honest standard, and that’s been true from day one. So there are 3500 ingredients of concern that we do not allow in our honest products. We don’t formulate with them, we don’t use them. And that is one of the reasons why our products are such a good fit for people with sensitive skin concerns and people who are looking for less junk in their products. When I look at the performance of our portfolio over the last year, the last year our consumer consumption was up 8% for the year. And even as I look at the recent quarter that we reported, our movement, our consumption was up 7% for the year and that was very well balanced on units and on price. So that was 4% growth on units, 3% growth on price, and we have not taken pricing in the recent year. So what that indicates to us is that actually our basket size is growing and people are buying larger sizes of our products. So for now, everything I can tell our consumer steadily believes that our products are worth it and they continue to support on us. Carla, we’re going to a question from a viewer as well. And it is in regard to China. The question about having products made in China, having products that will be in your products from China. Do you trust the ingredients? We have very rigorous standards at honest. So at honest we have our own in-house chemists, our own in-house toxicologists. And in fact, our toxicology team is so well known in the industry that they, in fact, do a lot of advising on policy related to toxicology. So our approach to the partners that we make our products with is we’re very close to understanding that the materials that they use must meet that standard of 3500 ingredients of concern that we do not allow in our products. Karl, I want to talk a little bit about the stock price. You had a great 20, 24 shares were up 90%, but it’s been a pretty rough start to 2025. Shares down about 60%. I know that there’s a lot of concerns on the investor front about tariffs right now. So I hear what you’re saying, that you’re confident in the products and you’re not necessarily worried about the trade down, but it does seem that that’s what markets are worried about here. Thanks for that question, Katie. We have over the last two years, so I joined Honest two years ago as CEO. And over the last two years, our top line has grown more than 20% and our bottom line margin expansion has grown 900 basis points. So in the year that we reported, our gross margins are now up to 38% gross margins. We’re very proud of that and that in one year’s time represented an expansion of 900 basis points of margin. When I reported our outlook, I also talked about the reasons why we feel confident in our ability to continue driving top line growth with margin expansion. And that’s really related to our transformation pillars. We’ve got three growth pillars that drive our strategy overall and allow us to deliver a comprehensive model that we believe is resilient. And we’ve built a plan such that we feel that we can be agile. Our three pillars are brand maximisation that talks all about what we do to drive the top line margin enhancement. And so we’ve got a lot of activities and a very rigorous playbook of continuing to make sure we can drive margin expansion. And then the third pillar is operating discipline, which is something that is really important for a small company like ours, which talks about how we do the work and how our teams collaborate in very disciplined ways, where we are constantly checking our goals and our performance measures and making sure that we are not surprise and that we’re delivering the outlook. We say, Hey, Karla, what’s Jessica Alba like? Oh, she’s the biggest shareholder, right? She’s your biggest shareholder. That is our. Thank you for asking. Honest was founded by four founders. We’re so proud of that. Two of our founders were diverse. Jessica is Latina, as you know, as am I, And one of our founders was Asian. So we and they were millennials. So when they created this company, they really built it for the times ahead of where we’re going. Jess still sits on our board. She’s a board member, and for me, I consider Jess like a soul sister. We’re both moms of teenagers, so we’re kind of supporting each other through that. We are both dynamic women trying to trailblazing business. So I just think the world of Jessica.