Another quarter, another consecutive three months of growth for E.l.f. Beauty as its bets on marketing, including an upcoming Super Bowl commercial, and hero products continue to pay off.
The three months ended Dec. 31 marked the Oakland, Calif.-based mass beauty company’s 20th consecutive quarter of growth, with net sales surging 85 percent to $270.9 million to beat Wall Street forecasts for $239 million.
Adjusted net income was $42.9 million, while adjusted diluted earnings per share came in at 74 cents, once again surpassing Wall Street estimates for 57 cents.
As a result, the company is forecasting full-year sales in a range of between $980 million and $990 million, compared with its previous forecast of $896 million to $906 million. Net income is expected to reach $164 million to $166 million, higher than previous expectations of $144 million to $146 million.
“Our vision is to create a different kind of beauty company and you can see that in the exceptional, consistent, category-leading growth we’ve delivered,” said Tarang Amin, E.l.f. Beauty’s chairman and chief executive officer.
As part of its strategy, the company has been quick to engage in social media and last year aired its first Super Bowl commercial. It will air its second on Sunday with a 30-second national spot starring some of the “Suits” cast alongside singer Meghan Trainor, among others.
This quarter’s earnings report was also the first to include skin care brand Naturium, the sale of which closed in October for $333 million.
Naturium staff have now been fully onboarded at E.l.f. and are preparing to launch the brand at Shoppers Drug Mart in Canada, of which E.l.f. has a long running relationship.
E.l.f. expects Naturium to contribute about $48 million in net sales, about $9 million in adjusted earnings before interest, taxes, depreciation and amortization and about 4 cents in adjusted EPS on a fully diluted basis in fiscal 2024.
Amin told WWD he’s open to more M&A opportunities, but any potential targets would need a similar growth story to Naturium. “We’re always open. But it would have to be special like Naturium. It’s growing really fast on the top line, it is profitable, it has a ton of whitespace opportunity, it complements our current portfolio. Naturium was the perfect type of acquisition. I tell people all the time if I see another Naturium, we will snatch it up. There is no doubt.”
And while he has a long list of what attributes a potential target needs to have, he is open on the category.
“Color cosmetics and skin care are the most obvious, but we’re also open to other adjoining categories. I spent eight years building up Pantene, so I like hair care. I like a lot of other categories. A lot of it depends on what the brand is and how does it complement our current portfolio,” he said.
Source: WWD