E.l.f. Beauty, a prominent cosmetics brand, announced significant earnings for the third fiscal quarter, exceeding market expectations and raising its outlook for the fiscal year. After initially rising 15% in after-hours trading, E.l.f.’s stock later retraced some of its gains.
For the third quarter, E.l.f. reported adjusted earnings per share of $1.24, surpassing the anticipated 72 cents. Revenue reached $490 million, exceeding the forecast of $460 million. The company’s net sales rose by 38% to $489.5 million compared to $355 million in the same period the previous year, attributed to strong global growth across its retail and e-commerce platforms. E.l.f.’s adjusted net income increased to $74.5 million from $43 million year-over-year.
A notable factor in this growth was E.l.f.’s recent acquisition of celebrity Hailey Bieber’s skincare brand, Rhode, in a deal valued at approximately $1 billion. Rhode contributed $128 million to E.l.f.’s net sales growth for the quarter, and the company now projects Rhode will add up to $265 million in net sales for the year, an increase of $65 million from earlier forecasts.
E.l.f. has also raised its full-year revenue guidance by $42 million to $50 million. CEO Tarang Amin highlighted that the company gained 130 basis points of market share for its e.l.f. Cosmetics brand and achieved a successful launch of Rhode in Sephora within the U.K. He emphasized the effectiveness of their value proposition, marketing strategies, and innovation.
Why this story matters: The earnings performance indicates strong market demand and successful brand strategies amidst rising competition in the beauty industry.
Key takeaway: E.l.f.’s strategic acquisition and focus on innovation have significantly boosted sales and market outlook.
Opposing viewpoint: Critics may argue that reliance on celebrity collaborations could make the brand vulnerable if trends shift or if partnerships don’t yield long-term consumer loyalty.
