On August 8, 2024, e.l.f. Beauty Inc (ELF, Financial) released its 8-K filing for the first quarter of fiscal 2025, showcasing impressive financial performance. The company reported a 50% increase in net sales, reaching $324.5 million, surpassing the analyst estimate of $303.45 million. Additionally, the diluted earnings per share (EPS) stood at $0.81 on a GAAP basis, significantly higher than the estimated $0.70.
Company Overview
e.l.f. Beauty Inc is a multi-brand beauty company that offers inclusive, accessible, clean, vegan, and cruelty-free cosmetics and skincare products. The company's mission is to make the best of beauty accessible to every eye, lip, face, and skin concern. e.l.f. Beauty Inc markets its products under the e.l.f. Cosmetics, W3LL PEOPLE, and Keys Soulcare brands, generating maximum revenue from the US market through both retail and e-commerce channels.
Performance Highlights
For the three months ended June 30, 2024, e.l.f. Beauty Inc reported:
- Net sales increased by 50% to $324.5 million, driven by strong performance in both retailer and e-commerce channels.
- Gross margin improved by approximately 80 basis points to 71%, attributed to favorable foreign exchange impacts, lower transportation costs, price increases in international markets, cost savings, and mix, partially offset by inventory adjustments.
- Selling, general, and administrative (SG&A) expenses rose to $180.6 million, or 56% of net sales, primarily due to increased marketing and digital spend, compensation and benefits, operations costs, retail fixturing and visual merchandising costs, professional fees, and depreciation and amortization.
- Net income was $47.6 million on a GAAP basis, with adjusted net income at $64.3 million.
- Adjusted EBITDA was $77.4 million, or 24% of net sales, up 4% year over year.
Financial Achievements
e.l.f. Beauty Inc's financial achievements are noteworthy in the Consumer Packaged Goods industry, where maintaining high growth and market share gains is challenging. The company has marked its 22nd consecutive quarter of both net sales growth and market share gains, placing it among a select group of high-growth consumer companies.
“We are off to a strong start this fiscal year, delivering 50% net sales growth and 260 basis points of market share gains in Q1,” said Tarang Amin, e.l.f. Beauty’s Chairman and Chief Executive Officer.
Key Financial Metrics
| Metric | Q1 FY2025 | Q1 FY2024 |
|---|---|---|
| Net Sales | $324.5 million | $216.3 million |
| Gross Profit | $231.3 million | $152.6 million |
| SG&A Expenses | $180.6 million | $91.9 million |
| Net Income | $47.6 million | $53.0 million |
| Diluted EPS | $0.81 | $0.93 |
Liquidity and Balance Sheet
As of June 30, 2024, e.l.f. Beauty Inc had $109.0 million in cash and cash equivalents and $159.2 million in long-term debt and finance lease obligations. This compares to $142.5 million in cash and cash equivalents and $59.6 million in long-term debt and finance lease obligations as of June 30, 2023. The company's strong liquidity position supports its ongoing growth initiatives and operational needs.
Updated Fiscal 2025 Outlook
e.l.f. Beauty Inc has raised its fiscal 2025 outlook, now expecting net sales to be in the range of $1,280-1,300 million, up from the previous estimate of $1,230-1,250 million. Adjusted EBITDA is projected to be between $297-301 million, compared to the earlier forecast of $285-289 million. Adjusted diluted earnings per share are anticipated to be $3.36-3.41, up from the prior estimate of $3.20-3.25.
For more detailed financial information, please refer to the company's 8-K filing.
Explore the complete 8-K earnings release (here) from e.l.f. Beauty Inc for further details.
