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E.l.f. Beauty Aspires to Reach $1 Billion

The company's ceo highlighted the mass-market brand's growth potential at the ICR Conference.

E.l.f. Beauty has the potential to become a billion-dollar brand — at least according to its chief executive officer.

“Our aspiration is to be a billion-dollar brand,” Tarang Amin, E.l.f.’s ceo said at the ICR Conference in Orlando, Fla., today. “One that’s highly profitable.”

As it stands now, E.l.f. has posted a 22 percent year-over-year net sales gain to $153.1 million for the first three quarters of 2016. The company has not yet reported fourth-quarter results. That sales jump is due to “growth in leading national retailers,” the company said when it released third-quarter results in November.

E.l.f., which built its 13-year-old business on selling high-quality, low-priced products, is distributed in Target, Wal-Mart, Walgreens and CVS, as well as in its own stores and on its own web site. But Amin said E.l.f. has a less than 3 percent market share in the U.S. color cosmetics space, which gives it ample room to expand. Plus, it’s playing in a market full of consumers who just can’t seem to get enough.

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“We often joke around the company that she has a bottomless makeup bag,” said E.l.f. president and chief financial officer John Bailey. “These consumers cannot get enough product.”

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Bailey, who joined E.l.f. from TPG Growth, the private equity firm that walked E.l.f. to the public markets back in September, was talking about beauty enthusiasts — the product gobbling demographic behind much of the category’s growth.

“She’s shopping across the value spectrum, and for her, it’s about brands that authentically deliver across her needs,” Amin said.

E.l.f., founded by father-and-son team Alan and Joey Shamah, “wanted to apply the fast-fashion model to beauty,” Amin said. “Alan was able to find a way of sourcing high-quality cosmetics at extraordinary value,” he added — and Joey introduced the brand exclusively online. Back then, each E.l.f. product cost $1 — today the range has expanded to include skin care and tools, and product prices range from $1 to around $14. The executives also touted E.l.f.’s engaged consumer base, noting that the company’s web site has more than 100,000 product ratings and reviews.

Going forward E.l.f.’s plan is to build brand awareness, lead innovation (the business can get a product to market in as little as 20 weeks, with an average of 27 weeks, Amin said) and grow with retail partners, as well as international, which makes up about 7 percent of the business, the executives said.