Power Grip Primer from Elf Beauty.
Courtesy: Elf Beauty
The beauty of the goblin It raised its full-year guidance on Wednesday after reporting 40% growth in sales.
The company's shares rose nearly 10% in after-hours trading.
The cosmetics retailer's earnings came in well above top and bottom line forecasts and it now expects sales to range between $1.32 billion and $1.34 billion during fiscal 2025, ahead of the $1.30 billion that analysts expected, according to LSEG.
Here's what Elf did in its fiscal second quarter compared to what Wall Street expected, based on a survey of analysts conducted by LSEG:
Earnings per share: 77 cents adjusted vs. 43 cents expected Revenue: $301 million vs. $286 million expected
The company's reported net income for the three-month period ended Sept. 30 was $19 million, or 33 cents per share, compared with $33 million, or 58 cents per share, a year earlier. Excluding one-time items, Elf had earnings of $45 million, or 77 cents per share.
Sales rose to $301 million, up about 40% from $216 million the previous year.
Elf raised its full-year revenue guidance from the previous range of $1.28 billion to $1.3 billion and also raised its revised earnings guidance. The retailer expects adjusted earnings to range between $3.47 and $3.53 per share, up from a previous forecast of $3.36 to $3.41 per share. Analysts were looking for earnings guidance of $3.51, according to LSEG.
The cosmetics company has been on a tear over the past couple of years thanks to its viral marketing and knack for attracting young shoppers with its value versions of coveted favorites.
“We're seeing multi-generational appeal at Elf. Not only are we the No. 1 brand among Gen Z by a very large margin, but we're also the most purchased brand among Gen Alpha and Millennials,” said CEO Tarang Amin at Elf. Interview with CNBC. “We're capturing consumers in almost every age and income group, which is great to see, and I think it just speaks to the strength of our strategy and the quality of our products.”
Amin said success drove both goal and Walgreens To plan to expand retail shelf space starting in the spring.
During the quarter, Elf's selling, general and administrative costs increased $74 million to $186.1 million, or 62% of net sales, but it still managed to achieve a gross margin of 71%, an increase of 0.4 percentage points from the same quarter last year. .
Amin attributed the increase in margin to favorable foreign exchange rates, price increases that were previously implemented at the international level, and its overall value.
“Our ability to design premium quality at these exceptional prices has been the real driver, but most of the progress we have made over the years has been through our mix of innovation,” Amin said. “As we introduce a new one of our holy grails, it gives us the opportunity to increase margin a little while still providing amazing value.”
The company is also working to build its international sales, which now make up about 21% of total revenue.
Amin said its exposure to markets outside the United States will help soften the blow from any tariff increases that may come under President-elect Donald Trump.
