Dive Brief:
- Starting the fiscal year on a high note, E.l.f. Beauty reported its first-quarter net sales increased 76% year over year to $216.3 million, according to a Tuesday press release. The cosmetics company’s net income jumped from $14.5 million last year to nearly $53 million.
- E.l.f.’s operating income increased by about 183% to $60.6 million while the company’s gross profit jumped from $83 million to $152.6 million.
- The company updated its fiscal 2024 guidance, now expecting net sales ranging from $792 million to $802 million instead of the previously forecasted $705 million to $720 million.
Dive Insight:
E.l.f.’s success in the first quarter has helped raise the company’s confidence in its future.
“We are off to a terrific start in our new fiscal year with net sales growth of 76% and market share gains of 260 basis points in Q1. This marks our 18th consecutive quarter of delivering both net sales growth and market share gains,” Tarang Amin, E.l.f. Beauty's chairman and chief executive officer, said in a statement. “As we look ahead, we believe we are in the early innings of unlocking the full potential we see for e.l.f. Beauty and are raising our fiscal 2024 outlook to reflect our continued momentum.”
On a call with analysts Tuesday, the CEO said that E.l.f.’s performance in the quarter was driven by its pricing strategy and its innovation process. The brand’s products are meant to provide everyday value at lower prices and the company is focused on building out product franchises instead of “one-and-done launches,” the executive said.
E.l.f.’s digital sales grew during the latest quarter, with CFO Mandy Fields noting that the company will continue to focus on growing the channel through its loyalty program.
“Our digitally led strategy continues to serve us well. Q1 digital consumption trends were up triple digits year over year. Digital channels drove 18% of our total consumption in Q1 as compared to 14% a year ago,” Fields said on the call. “We see opportunity to increase our digital penetration, particularly as we further enhance our Beauty Squad Loyalty Program. ... Our loyalty members drive almost 80% of our sales on elfcosmetics.com and continue to have higher average order values, purchase more frequently, have stronger retention rates and are a rich source of first-party data.”
The cosmetics company has successfully garnered the interest of Gen Z consumers, working with pop culture figures for its campaigns such as Jennifer Coolidge and Ian Paget. In March, E.l.f. also collaborated with American Eagle on a limited edition makeup set that included a branded denim tote bag.
