E.L.F. sales continue to defy pandemic downturn with solid growth
Oakland, California-based cruelty-free cosmetics company E.L.F. Beauty announced on Wednesday that its net sales rose 10% year over year in Q3, marking the group’s eighth consecutive quarter of revenue growth.
For the third quarter ended December 31, 2020, the company reported net sales of $88.6 million, up from $80.8 million in the same period in the previous year. According to the group, this increase was principally driven by strong e-commerce revenues, as well as solid international growth and a reasonable performance from national retailers.
“Our core value proposition and product innovation continue to resonate with consumers,” said E.L.F. Beauty chairman and CEO Tarang Amin in a release. “Of the top five color cosmetics brands in the U.S., E.L.F. grew the most share in the quarter.”
However, the company, which along with its namesake E.L.F. brand, owns W3LL PEOPLE and Alicia Keys’ Keys Soulcare brand, also reported increases in its quarterly selling, general and administrative expenses. In Q3 these costs rose to $50.8 million, accounting for 57% of net sales, compared to 49% in the prior-year period.
This rise in expenses was largely related to investments made by the company in marketing and digital, as well as expanding operational costs related to increases in e-commerce sales.
E.L.F.’s net income for the quarter was therefore $4.3 million, or $0.08 per diluted share, falling from $8.0 million, or $0.16 per diluted share, in the previous year’s third quarter.
Year to date, the company reported net sales of $225.4 million, up 8% compared to $208.1 million in the same nine-month period in the previous year. Net income for the period came to $6.3 million, or $0.12 per diluted share, down from $18.2 million, or $0.36 per diluted share.
Commenting on the continued progress of the company’s revenues during the ongoing health crisis, Amin explained, “our brand building efforts and digital focus fueled our growth before and during the pandemic, and we believe position us well for the future.”
Looking forward, E.L.F. has increased its sales and earnings guidance for the full fiscal year 2021. The company now expects its annual net sales to total between $304 million and 308 million, up from its previously reported outlook of between $297 million 303 million. This would mean an increase in annual revenues in the range of 7% to 9% compared to the previous year.
Adjusted income is now predicted to be between $33 million and 34 million, up from the company’s previous guidance of between $31 million and 33 million.
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