E.L.F. Beauty, known for its cruelty-free cosmetics, has defied the economic downturn caused by the pandemic by reporting strong growth in net sales for the third quarter of 2020. The company experienced a 10% increase in net sales compared to the same period in the previous year, marking its eighth consecutive quarter of revenue growth.

During the quarter that ended on December 31, 2020, E.L.F. Beauty achieved net sales of $88.6 million, up from $80.8 million in the previous year. This growth was primarily driven by strong e-commerce revenues, as well as successful international expansion and satisfactory performance from national retailers. Tarang Amin, the CEO of E.L.F. Beauty, attributed this success to the company’s core value proposition and its focus on product innovation. He highlighted that among the top five color cosmetics brands in the U.S., E.L.F. Beauty experienced the highest increase in market share during the quarter.

Despite the positive sales growth, E.L.F. Beauty also reported an increase in selling, general, and administrative expenses for the quarter. These costs accounted for 57% of net sales, amounting to $50.8 million, compared to 49% in the same period of the previous year. The rise in expenses can be attributed to investments in marketing and digital initiatives, as well as increased operational costs associated with the growth of e-commerce sales.

As a result, E.L.F. Beauty’s net income for the quarter decreased to $4.3 million, or $0.08 per diluted share, from $8.0 million, or $0.16 per diluted share, in the third quarter of the previous year. For the nine-month period ending on December 31, 2020, the company reported net sales of $225.4 million, an 8% increase compared to the previous year. However, net income fell to $6.3 million, or $0.12 per diluted share, from $18.2 million, or $0.36 per diluted share.

Despite the challenges posed by the ongoing pandemic, Amin expressed confidence in the company’s ability to navigate through these difficult times. He stated that E.L.F. Beauty’s brand building efforts and focus on digital innovation have fueled its growth both before and during the crisis, positioning it well for the future.

Looking ahead, E.L.F. Beauty has raised its sales and earnings guidance for the full fiscal year 2021. The company now expects annual net sales to range between $304 million and $308 million, representing a 7% to 9% increase compared to the previous year. Adjusted income is predicted to be between $33 million and $34 million. This updated guidance reflects the company’s confidence in its continued growth and resilience in the face of economic uncertainties.

E.L.F. Beauty’s strong revenue growth during the pandemic highlights the strength of the company’s brand and its ability to adapt and thrive in a challenging market environment. With its focus on product innovation and digital channels, the company is well-positioned to capitalize on evolving consumer preferences and seize opportunities for future growth.

Useful links:
1. E.L.F. Beauty Official Website
2. E.L.F. Beauty Q3 2020 Earnings Release