Elf Beauty there blew past Wall Street expectations as it posted a 51% increase in net sales in the second fiscal quarter.
The beauty company said it saw its 31st consecutive year of net sales growth, indicating strong performance across its portfolio. The revenue surge was driven by retail and e-commerce channels in the US and internationally, the company added.
“What I’m most excited about is seeing strength across the entire portfolio,” CEO Tarang Amin told CNBC in an interview. “Each of our brands contributed strong growth this quarter.”
Amin added that Elf is the most searched brand on TikTok Shop and the No. 2 cosmetics brand on the platform. The company also said it achieved strong results for Rhode, the skincare brand it acquired last year.
The company raised its full fiscal year guidance after a better-than-anticipated quarter. It now expects net sales in the range of $2 billion to $2.03 billion, compared to the previous range of between $1.94 billion and $1.97 billion. It also raised its adjusted EBITDA projection to $421 million to $427 million from between $401 million and $407 million.
Elf said it now expects adjusted earnings per share for the coming year to be between $3.82 and $3.86, exceeding its previous guidance of between $3.50 and $3.55 per share. It also expects net income of $231 million to $233 million, up from a previous range of $212 million to $215 million.
It has raised its guidance last quarter after beating expectations.
Amin said the company is “very bullish” on the holiday season, expecting high sales at the end of the year.
Here’s how the company’s performance in the second fiscal quarter compared to what Wall Street expected, based on a survey of analysts by LSEG:
- Earnings per share: $1.21 adjusted vs. 60 cents expected
- result: $520.8 million vs. $470.3 million
For the period ended Sept. 30, Elf reported net income of $30.03 million, or 50 cents per share, up significantly from about $3 million, or 5 cents per share, a year earlier.
Net sales increased 51% to $520.8 million.
Elf also saw significant growth in the international channel, with business up 165%. Amin told CNBC that only 25% of the company’s business is outside the US and that it has a “huge opportunity” to build on that momentum.
The company also said its gross margin increased 1.6% during the quarter, including a 0.3% benefit from rate returns. Amin previously said the retailer plans to reinvest the money into pricing and marketing to continue growing.
Although Elf received most of its refunds in the first fiscal quarter, some of those funds flowed through the second quarter, and the company expects that to receive an annual total of about $55 million. Amin told CNBC on Wednesday that the company lowered the price of about 10% of the units by $1 because of the tariff advantage.
“We’re seeing good unit momentum based on that,” he said.