e.l.f. Beauty Reveals Financial Performance for Q3 of Fiscal Year 2024

e.l.f. Beauty (NYSE: ELF) unveiled its financial outcomes for the three-month and nine-month periods concluding on December 31, 2023, in a recent announcement.

We aspire to establish a unique beauty company, evident in the remarkable and consistent growth that we’ve achieved,” stated Tarang Amin, Chairman, and Chief Executive Officer of e.l.f. Beauty. “In the third quarter, we experienced an 85% surge in net sales and a 305 basis points increase in market share, marking our 20th consecutive quarter of growth across color cosmetics, skincare, and international markets. Our team’s dedication is truly commendable.”

Results for the Three Months Ended December 31, 2023:

  • Net sales saw a substantial 85% rise to $270.9 million, propelled by robust performances in both retailer and e-commerce channels.
  • Gross margin increased by around 350 basis points to 71%, driven by favorable foreign exchange impacts, improved transportation costs, cost savings, and a favorable product mix.
  • Selling, general and administrative expenses (SG&A) rose by $84.7 million to $160.1 million, constituting 59% of net sales. Adjusted SG&A, excluding specific items, increased by $79.1 million to $147.3 million, representing 54% of net sales. The increase in SG&A was primarily due to higher spending on marketing and digital initiatives, compensation and benefits, operational costs, retail fixturing, visual merchandising, and professional fees.
  • Net income stood at $26.9 million on a GAAP basis, while adjusted net income (excluding specific items) reached $42.9 million.
  • Diluted earnings per share (GAAP) were $0.46, and adjusted diluted earnings per share were $0.74.
  • Adjusted EBITDA reached $59.1 million, comprising 22% of net sales, marking a 61% YoY increase.

Results for the Nine Months Ended December 31, 2023:

  • Net sales surged by 80% to $702.8 million, driven by strong performances in both retailer and e-commerce channels.
  • Gross margin increased by approximately 400 basis points to 71%, attributed to favorable foreign exchange impacts, cost savings, a favorable product mix, improved transportation costs, and lower inventory adjustments, partially offset by costs associated with retailer activity and space expansion.
  • SG&A increased by $163.1 million to $364.2 million, constituting 52% of net sales. Adjusted SG&A rose by $150.2 million to $329.5 million, representing 47% of net sales. The increase in SG&A dollars was primarily due to higher spending on marketing and digital initiatives, compensation and benefits, operational costs, retail fixturing, visual merchandising, and professional fees.
  • Net income reached $113.1 million on a GAAP basis, while adjusted net income was $152.9 million.
  • Diluted earnings per share (GAAP) were $1.97, and adjusted diluted earnings per share were $2.66.
  • Adjusted EBITDA was $193.8 million, comprising 28% of net sales, marking a 103% YoY increase.

Balance Sheet as of December 31, 2023:

As of December 31, 2023, the company held $72.7 million in cash and cash equivalents and had $164.4 million in long-term debt and finance lease obligations, compared to $87.0 million in cash and cash equivalents and $62.2 million in long-term debt and finance lease obligations as of December 31, 2022.

Naturium Acquisition:

On October 4, 2023, e.l.f. Beauty successfully completed the acquisition of Naturium, a rapidly growing, high-performance skincare brand, for $333.0 million in a combination of cash and company stock, aligning with the company’s mission to make beauty accessible across all aspects.

Updated Fiscal 2024 Outlook:

The company now anticipates a 69-71% year-over-year increase in net sales for fiscal 2024, up from the previously expected 55-57% increase.

Webcast Details:

The company will host a webcast to discuss the results from its third quarter fiscal 2024 on February 6, 2024, at 4:30 p.m. Eastern Time.

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