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E.l.f. Beauty Raises Full-year Forecast

Chief executive officer Tarang Amin is "highly confident" about the holiday period.

While the Estée Lauder Cos. cut its annual forecast Wednesday, mass beauty company E.l.f. has raised guidance.

For the fiscal 2023, E.l.f. is now expecting net sales of between $478 million and $486 million, versus previous guidance of between $448 million and $456 million.

Adjusted diluted earnings per share are now expected to come in between $1.07 and $1.10, above the previous forecast of $0.84 to $0.87.

In its second quarter ended Sept. 30, net sales increased 33 percent to $122.3 million, primarily driven by strength in both retailer and e-commerce channels. This was up from $91.9 million a year earlier and beat Wall Street forecasts of $115 million.

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Net income was $11.7 million, up from $5.7 million a year earlier. Diluted earnings per share were $0.21.

“We’re really proud of the team being able to deliver our 15th consecutive quarter of growth and this time up 33 percent,” Tarang Amin, E.l.f.’s chairman and chief executive officer, told WWD in an interview. “And I’m always most proud of when we pick up share and we picked up 115 basis points of market share this quarter, too, so it was just a terrific quarter for us.”

He added that while he is seeing some trade down from prestige, the company is also gaining share within mass, recently surpassing troubled Revlon in a color cosmetics ranking.

“We’re by far the fastest-growing, top five color cosmetics brand. We just passed Revlon for the number-four position overall. And so I think we’re a beneficiary in both ways, both from prestige but also within mass,” Amin continued.

As for price increases, E.l.f., which also owns Keys Soulcare in partnership with Alicia Keys, raised prices in March in response to higher transportation costs and inflationary pressures on about two-thirds of items and left the other third untouched and that has not affected demand, according to Amin. For now, he doesn’t see the need for further price hikes.

On the forthcoming holiday period, Amin is highly confident, in his own words, noting that the company’s strategy of forgoing holiday kits to instead focus on key products has paid off.

“I think the fundamental insight is E.l.f., given its affordability, is a terrific brand to gift whether we put it in a box or the consumer puts it in the box, so we’re staying with that same strategy this year. We might have had a few limited holiday kits online and with some of our retailers, but the real focus is on the fundamental core items that are really driving a lot of our movement,” he said.