ELF Beauty announced its financial results for the three and nine months ended December 31, 2023.
The company said its net sales for the three months ended December 31, 2023 increased by 85% compared to the three months ended December 31, 2022, primarily from retail and e-commerce channels. The strong performance of both resulted in a total of $270.9 million.
Gross margin increased approximately 350 basis points to 71%. This is primarily due to favorable currency effects, improved transportation costs, cost reductions and configurations.
Net income was $26.9 million on a GAAP basis. Adjusted net income was $42.9 million.
Diluted earnings per share were $0.46 on a GAAP basis. Adjusted diluted earnings per share were $0.74. Adjusted EBITDA was $59.1 million (22% of net sales), an increase of 61% from the prior year period.
Taran Amin, Chairman and CEO of ELF Beauty, said: “Our vision is to create a different kind of beauty company, and that is based on the exceptional work we have achieved. You can see this by looking at the consistent growth at the top of the category.” “In the third quarter, we saw an 85% increase in net sales and a 305 basis point increase in market share, each marking our 20th consecutive quarter of growth. We are very proud of the progress we continue to make in these areas.”
Net sales increased 80% to $702.8 million for the nine months ended December 31, 2023, compared to the nine months ended December 31, 2022. This is primarily due to strong performance in both retail and e-commerce channels.
Gross margin increased approximately 400 basis points to 71%. This was primarily driven by favorable currency effects, cost reductions and mixes, improved transportation costs, and lower inventory adjustments, partially offset by costs related to retailer activity and space expansion. .
Selling, administrative and administrative expenses increased $163.1 million to $364.2 million, representing 52% of net sales. Adjusted selling, general and administrative expenses increased $150.2 million to $329.5 million, representing 47% of net sales. The increase in SG&A expenses was primarily due to increases in marketing and digital spending, compensation and benefits, operating costs, retail fixtures and visual merchandising costs, depreciation and professional fees.
Net income was $113.1 million on a GAAP basis. Adjusted net income was $152.9 million. Diluted earnings per share were $1.97 on a GAAP basis. Adjusted diluted earnings per share were $2.66. Adjusted EBITDA was $193.8 million (28% of net sales), an increase of 103% from the prior year period.
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