E.l.f. Beauty posts 51% sales increase, raises full-year guidance

Summary

• E.l.f. Beauty reported a 51% increase in net sales for its second fiscal quarter, surpassing Wall Street expectations.
• The company achieved its 31st consecutive quarter of net sales growth driven by retail & e-commerce channels in the U.S. & internationally.
• Every brand in the portfolio contributed to strong growth, with CEO Tarang Amin noting E.l.f. is the most-searched brand on TikTok Shop & the No. 2 cosmetics brand on the platform.
• Rhode, the skincare brand acquired last year, posted strong results during the quarter.
• E.l.f. raised its full fiscal-year net sales guidance to a range of $2 billion to $2.03 billion from a previous range of $1.94 billion to $1.97 billion.
• Adjusted EBITDA projections were increased to $421 million to $427 million from $401 million to $407 million.
• Adjusted earnings per share guidance was raised to $3.82 to $3.86 from $3.50 to $3.55.
• Net income guidance was updated to a range of $231 million to $233 million from $212 million to $215 million.
• Second fiscal quarter earnings per share were $1.21 adjusted compared to 60 cents expected, while revenue reached $520.8 million versus $470.3 million expected.
• Net income for the period ended Sept. 30 was $30.03 million, or 50 cents per share, up from roughly $3 million, or 5 cents per share, the prior year.
• International business grew 165%, though it currently represents only 25% of total company business.
• Gross margin increased 1.6% during the quarter, including a 0.3% benefit from tariff refunds.
• The company expects to receive approximately $55 million in tariff refunds for the year & lowered prices on about 10% of units by $1 due to these benefits.
• CEO Tarang Amin expressed strong optimism for the holiday season, expecting high sales through the end of the year.