E.l.f. Beauty Beats Expectations with 76% Sales Jump and Raises Full-Year Outlook Again
E.l.f. Beauty, the cosmetics company known for its viral TikTok marketing and affordable pricing, impressed investors as it raised its full-year outlook for the second quarter in a row. The company reported a 76% year-over-year increase in sales, surpassing Wall Street’s expectations.
Not only did E.l.f. Beauty witness a significant boost in sales, but its profits nearly tripled compared to the same period last year. As a result, the company’s shares jumped approximately 9% in extended trading on Wednesday.
According to analysts surveyed by LSEG, E.l.f. Beauty reported adjusted earnings per share of 82 cents, surpassing the projected 53 cents. Additionally, the company’s revenue reached $215.5 million, exceeding the estimated $197.1 million.
During the three-month period ending on September 30, E.l.f. Beauty’s net income stood at $33.3 million, or 58 cents per share, compared to $11.7 million, or 21 cents per share, from the previous year. Adjusted for one-time items, the company reported earnings of $47.1 million, or 82 cents per share. Sales for the quarter reached $215.5 million, a 76% increase from $122.3 million in the same period last year.
The impressive performance prompted E.l.f. Beauty to raise its full-year outlook once again. The company now expects a net sales increase between 55% and 57%, projecting a range of $896 million to $906 million. This surpasses the previous estimate of $852 million, or a growth rate of 47.1%. Furthermore, E.l.f. Beauty raised its adjusted profit guidance, anticipating full-year adjusted earnings between $144 million and $146 million, compared to the previous range of $125 million to $127 million.
CEO Tarang Amin attributed the company’s success to its value proposition, delivering products of prestige quality at affordable prices, as well as innovative offerings inspired by both the prestige beauty industry and the E.l.f. community. E.l.f. Beauty’s marketing efforts contributed to its strong sales growth, with digital sales increasing approximately 75% during the quarter. International sales also saw significant growth of 157%, while the skincare line experienced over 100% growth.
When asked about the sustainability of E.l.f. Beauty’s strong sales growth, Amin confidently pointed to the company’s raised guidance and expressed optimism about the future. He emphasized E.l.f. Beauty’s ability to double its market share again in the coming years.
E.l.f. Beauty’s margins for the quarter were at 71%, a 5.7 percentage point increase compared to the same period last year. Lower inventory adjustments, cost savings, improved transportation costs, favorable foreign exchange rates, and the company’s high volumes contributed to the improved margins.
While E.l.f. Beauty began as an online-only company, it has expanded its presence in drug stores and mass retailers such as Walmart and Target. Despite its heavy wholesale presence, the company maintains high margins by avoiding excessive promotions and discounting.
As E.l.f. Beauty continues to impress with its strong sales growth and raised outlook, investors remain confident in the company’s future prospects.