E.L.F. Beauty, a cosmetics company based in Oakland, California, has reported a 7% increase in net sales for the second quarter. The company’s net income, however, declined due to higher costs. In the quarter ending on September 30, 2020, E.L.F. achieved net sales of $72.4 million, compared to $67.6 million in the same period the previous year. This growth can be attributed to the company’s strong performance in the digital channel and international markets.

Tarang Amin, the chairman and CEO of E.L.F., expressed satisfaction with the company’s consistent growth, noting that it has achieved seven consecutive quarters of net sales growth. Amin also highlighted that E.L.F. was the only brand among the top five color cosmetics brands in the U.S. to experience growth and gain market share, according to Nielsen.

However, E.L.F. faced increased selling, general, and administrative expenses, which accounted for 62% of net sales, compared to 57% in the previous year. These higher expenses were mainly due to increased employee compensation costs as the company invested in enhancing its marketing, digital, and innovation capabilities.

As a result, E.L.F.’s net income for the second quarter was $0.4 million, or $0.01 per diluted share, a decrease from $6.5 million, or $0.13 per diluted share, in the same period last year. For the first half of the fiscal year, E.L.F. reported net sales of $136.9 million, a 7% increase from the previous year. Net income for the period was $2.0 million, or $0.04 per diluted share, down from $10.2 million, or $0.20 per diluted share.

Looking ahead, E.L.F. projects net sales ranging from $297 million to $303 million for the full fiscal year, compared to $283 million in the previous year. The company expects adjusted net income to be between $31 million and $33 million, with adjusted net EPS projected to be between $0.59 and $0.63. Additionally, E.L.F. aims to achieve mid- to high-single digit compounded annual revenue growth over the next three fiscal years.

Apart from its own brand, E.L.F. also owns the clean-beauty brand W3ll People, which it acquired in February 2020. Furthermore, the company plans to launch the Keys Soulcare lifestyle beauty brand in collaboration with Alicia Keys in 2021.

Useful links:
1. E.L.F. Beauty Official Website
2. W3ll People Official Website