E.l.f. Beauty started fiscal 2024 with a bang.
The Oakland, California-based beauty company, whose brands include Well People and Soulcare as well as its namesake cosmetics and skin care lines, once again blew through Wall Street estimates on both the top and bottom lines, allowing it to raise its full-year forecasts.
Net sales increased 76 percent to $216.3 million for the three months ended June 30, compared with $122.6 million a year earlier, primarily driven by strength in both retailer and e-commerce channels. Analysts polled by Factset had on average penciled in sales to come in at $206 million.
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“This marks our 18th consecutive quarter of delivering both net sales growth and market share gains. We are one of only five publicly traded consumer companies out of 274 that has grown for 18 straight quarters and averaged at least 20 percent sales growth per quarter over that period,” said Tarang Amin, E.l.f. Beauty’s chairman and chief executive officer.
While color cosmetics continued to perform well, skin care sales were particularly strong during the quarter, according to Amin. “I think consumers really appreciate kind of the quality of our skin care at the affordable prices,” he continued. “So that’s definitely working, but there wasn’t a segment we had that didn’t exhibit growth so we’re in a really good position.”
Adjusted diluted earnings per share were $1.10, up from 39 cents. Again, this beat Wall Street forecasts of 65 cents.
As a result of the better-than-expected quarterly performance, E.l.f. updated its full-year outlook for fiscal 2024 to reflect an expected 37 to 39 percent year-over-year increase in net sales, as compared to an expected 22 to 24 percent increase previously.
It is now expecting net sales to be in the region of $792 million to $802 million, up from previous expectations of $705 million to $720 million. Net income is forecast to come in at $125 million to $127 million, from $98.5 million to $100.5 million.
Amin believes it can only go up from here, telling WWD in an interview that he’s bullish about the future.
“While we have a 9.5 percent share, the number-three position in color cosmetics nationally, we’re the number-one brand at Target with an 18 share. The only difference between Target and everyone else is that Target had a five- or six-year head start over everyone,” referring to the fact that it initially launched exclusively in Target. “As others replicate the success we’ve seen at Target, I’m even more bullish about the future in not only color cosmetics but also skin care.”
E.l.f. was named the 63rd biggest beauty manufacturer in 2022 by Beauty Inc, with an estimated $497 million in sales. A separate WWD study of 104 global apparel, luxury, retail and beauty companies found that only 26 firms in the space beat the Dow last year, with E.l.f. leading the way, rising 66.5 percent. This marked quite the turnaround as at one point in 2019 shares fell below $8. Shares closed down 0.2 percent, or 22 cents, to $116.50 on Tuesday.