Elf Beauty has raised its full-year forecast for 2024 after sales soared in the third quarter due to strength in its retail channel and “high-profile activations.”
The drugstore brand’s net sales increased 85% to US$270.9 million in the three months ended December 31, 2023, marking the 20th consecutive quarter of growth.
Net income for the period amounted to $26.9 million, up from $19.1 million in the year-ago period.
Strengths in both e-commerce and retail channels and the launch of “culturally relevant” campaigns were cited as key drivers of success.
Elf currently expects full-year sales to be in the range of $980 million to $990 million.
This has significantly increased from the previous forecast of $896 million to $906 million.
“Elf Beauty” [is] Taran Amin, CEO and Chairman of Elf Beauty, said:
“Given our momentum, we think we have an opportunity to double our share again over the next three years.”
The company’s gross profit margin also increased by about 350 basis points to 71% in the quarter.
Favorable foreign exchange effects, improved transportation costs and cost savings contributed to this result.
Launch of Glow Reviver Lip Oil contributes to increased sales of Elf Beauty
What caused Elf’s sales to skyrocket?
Elf’s international net sales increased 119% in the third quarter on increased unit sales, driving 15% of the business in the period.
Amin added that the company has experienced “tremendous growth” in the UK and Canada, which are now among its “largest global markets.”
Elf is currently the 4th largest cosmetics brand in Canada and the 6th largest cosmetics brand in the UK.
Innovations in five of our largest franchises – Halo Glow, Camo, Power Grip, Holy Hydration and Putty – also contributed to strong sales.
A key example was the expansion of the Camo franchise into the blush category with the launch of Camo Liquid Blush.
As well as the brand’s new Glow Reviver Lip Oil, “one of the most requested items from our community,” Amin said.
Elf also made sure it was in line with the cultural zeitgeist by launching several “buzz-worthy activations.”
A notable example is elf Up, the brand’s first experience on the online gaming platform Roblox, which teaches users entrepreneurship.
It has been viewed over 4 million times since its launch and was voted the #1 Branded Experience on Roblox with a 96% rating.
Elf also increased its online presence and strengthened relationships with existing retailers.
The company was named one of the fastest growing beauty brands on online retailer Amazon during the quarter and also successfully launched on TikTok Shop.
At Target, we are the longest-running domestic retail partner and “we are currently the No. 1 brand with approximately 19% market share,” Amin commented.
“This is almost double the share we were getting at Target just a few years ago.
“We are now focused on replicating our success at Target at other major retailers.”
The earnings report also included for the first time Naturium, the skincare brand that Elf acquired in October 2023 for $333 million.
“Naturium has doubled our skincare penetration to 18% of retail sales,” commented Amin.
“And it has given us a rapidly growing complementary brand to further our aspirations in the skin care space.”
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