Elf Beauty profits as consumers tighten their belts – WWD

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Elf Beauty shrugged off a growing number of headwinds, from technical recessions and record inflation to supply chain headaches and currency swings, to post its 14th straight quarter of net sales growth.

It also beat Wall Street forecasts on the upper and lower lines.

“We are always attentive and keep our eyes peeled for how the consumer is doing, but our business has actually done extremely well regardless of the environment,” said Tarang Amin, President and CEO of Elf. , to WWD in an interview. the company released its first quarter fiscal 2023 results. “We were one of the few brands that really saw strong growth during the pandemic when color cosmetics was hit. We’ve been through different supply disruptions and lockdowns in China, so I would say what gives me confidence, even in a recessionary environment, is that value equation. When consumers’ wallets get squeezed, we have great deals.

In particular, he cited Elf’s $10 Power Grip Primer — his top-selling product — as benefiting from declining consumer trade compared to a $34 prestige primer sold by another brand he doesn’t. didn’t name, adding that the company “also takes a ton of share in the mass arena too.

All this despite the fact that Elf raised prices for around two-thirds of its storage units in May in response to rising transportation costs.

“We actually saw better elasticity than what we had modeled and I think part of that is while we increased the prices, we still made sure we had an amazing value equation,” Amin continued. .

On Keys Soulcare, the Elf-owned beauty brand launched in partnership with Alicia Keys 15 months ago, he pointed out that she was making “real progress” in terms of building brand awareness in a beauty space. packed with celebrities and innovation, including launching its first SPF. produced earlier this week.

As for W3ll People, the own brand it acquired in 2020 for $27 million, he added that it is now part of a subset of Ulta Beauty stores and also continues to grow in Target.

For the three months ended June 30, net sales rose 26% to $122.6 million, beating analyst estimates of $117 million. Adjusted net income was $21.1 million, or 39 cents per share.

Net income was $14.5 million, while diluted earnings per share were 27 cents. Analysts had expected EPS of 26 cents.

Its 2023 net sales outlook rose to $448 million to $456 million, from $432 million to $440 million, while net income is expected to be around $47 million to $48.5 million, from $43.5 million to 45, $5 million.

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