E.l.f. Beauty has raised its 2024 full year forecast after sales soared in the third quarter, driven by strength in retail channels and “buzzworthy activations”.
The drugstore brand’s net sales increased 85% to US$270.9m for the three months ended 31 December 2023, marking its 20th consecutive quarter of growth.
Net income for the period reached $26.9m, up from $19.1m last year.
Strength in both e-commerce and retail channels, and launching “culturally relevant” campaigns, were cited as crucial drivers to its success.
E.l.f. is now forecasting full year sales in a range of between $980m and $990m.
A significant jump from its previous outlook of $896m to $906m.
“E.l.f. Beauty [is] in a rarified group of consistent, high-growth consumer companies,” said e.l.f. Beauty CEO and Chair Tarang Amin.
“Given our momentum, we see an opportunity to double our share again in the next three years.”
The company’s gross margin also increased approximately 350 basis points in the quarter to 71%.
Favourable foreign exchange impacts, improved transportation costs and cost savings were attributed to the result.
The launch of Glow Reviver Lip Oil has helped boost e.l.f. Beauty's sales
What has caused e.l.f.’s sales to surge?
E.l.f.’s international net sales grew 119% in Q3, led by higher unit volume, driving 15% of the business in the period.
It experienced “terrific growth” in the UK and Canada, which are now among its “largest global markets,” added Amin.
E.l.f. is now the number-four cosmetics brand in Canada and number-six in the UK.
Innovation in its five largest franchises – Halo Glow, Camo, Power Grip, Holy Hydration and Putty – have also helped deliver strong sales.
Expanding the Camo franchise into the blush category with the launch of Camo Liquid Blush was named a key example.
As well as the brand’s new Glow Reviver Lip Oils, “one of the most requested items from our community,” said Amin.
E.l.f. also made sure it was on the cultural zeitgeist with the launch of several “buzz-worthy activations”.
A standout example was e.l.f. Up – the brand’s first experience on online gaming platform Roblox, which teaches users about entrepreneurship.
It has had more than four million plays since launch and has been named the number-one branded experience on Roblox, with a 96% rating.
E.l.f. also grew its online presence and strengthened its pre-existing retailer relationships.
The company was named among the fastest growing beauty brands on online retailer Amazon for the quarter, while it also successfully launched on TikTok Shop.
In Target, its longest standing national retail partner, “we are now the number-one brand, with about a 19% share,” commented Amin.
“This is nearly double the share we had in Target just a few years ago.
“We are now focused on replicating our success at Target across other key retailers.”
This earning report was also the first to include skin care brand Naturium, which e.l.f. acquired in October 2023 for $333m.
“Naturium has doubled our skin care penetration to 18% of retail sales,” commented Amin.
“And gives us a fast growing, complementary brand to further our aspirations in the skin care category.”