E.l.f. Beauty’s sales surge fuels raised annual forecast

The cosmetics company marked its 31st consecutive quarter of net sales growth, a result of strong performance across its entire brand portfolio. Both online and in-store sales contributed to the increase, with notable gains seen in the United States and international markets.

“The thing I’m most pleased about is we saw strength across our entire portfolio,” CEO Tarang Amin stated in an interview with CNBC. “Every one of our brands contributed strong growth this quarter.”

According to Amin, E.l.f. currently holds the top spot as the most-searched brand on TikTok Shop and ranks as the second most popular cosmetics brand on the platform. The company also highlighted positive results from Rhode, the skincare brand it acquired last year.

Following this strong performance, E.l.f. Beauty revised its full-year financial projections upwards. The company now anticipates net sales between $2 billion and $2.03 billion, a rise from the previous estimate of $1.94 billion to $1.97 billion. Adjusted EBITDA is now projected to be between $421 million and $427 million, compared to the prior range of $401 million to $407 million. Adjusted earnings per share are expected to be between $3.82 and $3.86, surpassing the previous guidance of $3.50 to $3.55 per share. Net income is now forecasted to be between $231 million and $233 million, up from the earlier range of $212 million to $215 million.

This upward revision follows a previous adjustment made last quarter after the company outperformed expectations. Amin expressed optimism about the upcoming holiday season, predicting continued high sales.

Here’s a summary of the company’s second fiscal quarter performance against analyst expectations, according to LSEG:

Earnings per share: $1.21 adjusted vs. 60 cents expected Revenue: $520.8 million vs. $470.3 million

For the period ending September 30, E.l.f. reported a net income of $30.03 million, or 50 cents per share, a significant increase from approximately $3 million, or 5 cents per share, in the previous year. Net sales reached $520.8 million, a 51% increase.

The company experienced substantial growth in its international channels, with a 165% increase. Amin noted that currently only 25% of E.l.f.’s business originates outside the U.S., highlighting a considerable opportunity for future expansion.

Gross margin also increased by 1.6% during the quarter, benefiting from $0.3 million in tariff refunds. Amin previously announced plans to reinvest these funds into pricing and marketing to sustain growth. While most refunds were received in the first fiscal quarter, some impacted the second quarter, with the company anticipating a total of around $55 million annually. Amin told CNBC that the company reduced the price of roughly 10% of its products by $1 due to these tariff benefits.