Elf beauty Wednesday beat Wall Street expectations by posting a 51% increase in net sales during its fiscal second quarter.
The beauty company said it recorded its 31st consecutive quarter of net sales growth, attributing the streak to strong performance across its portfolio. The increase in revenue was driven by both U.S. and international retail and e-commerce channels, the company added.
“What I’m most pleased about is that we’ve seen strength across our entire portfolio,” CEO Tarang Amin told CNBC in an interview. “Each of our brands contributed to strong growth this quarter.”
Amin added that Elf is the most searched for brand on TikTok Shop and the #2 cosmetics brand on the platform. The company also said it saw strong results for Rhode, the skin care brand it acquired last year.
The company raised its full-year guidance after a better-than-expected quarter. It now expects net sales of between $2 billion and $2.03 billion, compared to a previous range of between $1.94 billion and $1.97 billion. It also raised its adjusted EBITDA projection to a range of $421 million to $427 million, from $401 million to $407 million.
Elf said it now expects adjusted earnings per share for the year to be between $3.82 and $3.86, beating previous forecasts of between $3.50 and $3.55 per share. It also expects net income of between $231 million and $233 million, compared to a previous range of $212 million to $215 million.
It had already raised its forecasts last quarter after outperforming its expectations.
Amin said the company is “very optimistic” about the holiday season and expects high sales through the end of the year.
Here’s how the company performed in its fiscal second quarter compared to what Wall Street expected, based on a survey of analysts by LSEG:
- Earnings per share: $1.21 adjusted versus 60 cents expected
- Income: $520.8 million versus $470.3 million
For the period ended Sept. 30, Elf reported net income of $30.03 million, or 50 cents per share, up significantly from about $3 million, or 5 cents per share, the year before.
Net sales increased 51% to $520.8 million.
Elf also saw significant growth in its international channels, with business up 165%. Amin told CNBC that only 25% of the company’s business is outside the United States and that it has a “tremendous opportunity” to capitalize on this dynamic.
The company also said its gross margin increased 1.6% during the quarter, including a 0.3% profit from tariff reimbursements. Amin previously said the retailer plans to fully reinvest that money into pricing and marketing to continue to drive growth.
Although Elf received most of its refunds during its first fiscal quarter, a portion of those funds were paid out during the second quarter, and the company expects to receive an annual total of approximately $55 million. Amin told CNBC on Wednesday that the company had reduced the price of about 10% of its $1 units because of the pricing advantages.
“We’re seeing tremendous momentum within the unit because of this,” he said.
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