The 14-year old company that went public last year increased net sales by 18 percentin 2017, to $270 million and profits jumped to $33.47 million, equal to 64 cents per share, from $5.3 million in 2016, according to full-year financial results. E.l.f. said sales increased across retail and its direct-to-consumer business, leading its gross margin to hit 61 percent in 2017, up from 58 percent.
Tarang Amin, E.l.f. ‘s chairman and chief executive officer, said the year’s performance “demonstrates the strength of the E.l.f. brand, driven by our mission to make luxurious beauty accessible for all.”
Amin also noted that last year included the addition of nearly 130 new products, an organic increase in brand awareness, expansion with retail partners, like Ulta, “and investments in the team and infrastructure to enable future growth.”
For 2018, the company expects net sales growth to slow a bit, projecting up to $291 million, an increase of 8 percent, while profits will likely land around $31 million. E.l.f. said this projection “assumes minimal new space or doors at national retailers other than the previously announced expansion at Ulta Beauty.”
Amin told WWD that the recent headwinds in the color cosmetics category resulted in a roughly 3 percent decline in the back half of 2017, adding to what he estimated to be a 3 percent dip in the category in late 2016.
“We’re proud of the results in a category that has been down and we’re not worried about it from a long-term structural standpoint,” Amin said. “Color cosmetics in beauty has been good for decades…we’ve seen it bounce around from time to time. We’re fundamentally bullish on the category.”
But skin care has been on a upswing in the industry, and Amin said the category, which E.l.f. entered about two years ago with the same goal of offering luxury-level products at a budget price, is doing well and has room for expansion.
“I’d put our skin-care innovation up against anyone’s,” the ceo said. “We’re very bullish on the category given global skin care is bigger than global color cosmetics.”
While additional growth through 2018 is expected to come from getting more product into existing retail locations, Amin hinted at some larger things afoot at the company.
He said the company is “open” to the possibility of an acquisition, noting that after four years at the helm, E.l.f. seems ready to “leverage the capability that we’ve built.”
“We’ve been looking but because we have the luxury of strong sales we don’t have to do an acquisition.”
As for launching a new brand under the E.l.f umbrella, Amin demurred, saying “there are some things that we have in the pipeline” that he’s not willing to discuss quite yet.
Asked if E.l.f is still on track to become a $1 billion brand, Amin was more bold: “We very much are.”
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