E.l.f. Beauty is taking over even more shelf space.
The mass-market beauty business just finished a 50 percent increase in its shelf space at Target, and is increasing its space at Wal-Mart by a linear 20 percent, executives said on the company’s second quarter earnings call Wednesday.
Nielsen data also shows improvements in E.l.f.’s market share gain — according to chief executive officer Tarang Amin, the business was up to 4.4 percent market share, versus 3.8 for the prior 52-week period.
At Wal-Mart, E.l.f. is now a “key priority brand,” Amin said, particularly as the chain updates its beauty offering with the “white wall initiative.” That project aims to elevate the beauty presentation.
E.l.f. has less than four feet of space in more than 90 percent of Wal-Mart doors, so the 20 percent additional footage is a “tremendous opportunity for further expansion,” Amin noted.
In addition to the Target and Wal-Mart expansions, E.l.f. is in the process of going into 200 Ulta Beauty doors, with potential for further expansion in 2018. The brand is also now in 200 SuperDrug stores in the U.K.
“Our overall distribution strategy is we want to fall where the makeup enthusiast wants to buy her products,” Amin said. “Then what we do is a combination — we have all the data from our online sales…we recommend to [the stores] what we think will be some of the bestsellers.”
“Even if there’s something we codevelop with a retailer, we will first validate and test it on [our web site] and it will also be available on [our web site] because we want our core user to know she can always go [there],” Amin said.
That strategy has helped the company grow even as other firms in the mass-market consumer packaged goods space have struggled. For retailers, E.l.f.’s strategy of launching online and testing products there amounts to what the ceo described as an “arsenal of proven and validated innovation where we’re not trying to guess…but have products that are really performing in the marketplace.”
One of those new innovations is the company’s seven-stockkeeping unit Beauty Shield skin-care lineup, which features pollution and sun-protecting products: the Magnetic Mask Kit, $24; Vitamin C Pollution Prevention Serum, $16; SPF 50 Skin Shielding Moisturizer, $12; SPF 50 Skin Shielding Primer, $12; Massaging Overnight Recovery Cream, $14; Daily Defense Makeup Mist, $8, and Dual Defense Cleansing Facial Brush, $8.
That line launched at Coachella as part of E.l.f.’s Beautyscape influencer program, which reached 158 million people, Amin said.
E.l.f. posted a 27 percent sales increase year-over-year for the quarter, with $55.9 million in sales, up from $44.1 million. The business also logged a $2.7 million loss for the quarter, related to its initial public offering. Adjusting for that, E.l.f. posted $6.2 million in profits. For the six-month period ended June 30, E.l.f. posted $116.4 million in sales, up from $96.8 million in the prior-year period. For the first half, E.l.f. posted $1.1 million in net income.
“We are pleased with our strong progress in Q2 highlighted by a 27 percent increase in net sales and over 700 basis point expansion in gross margin,” Amin said. “Our performance continues to demonstrate the successful execution of our mission to make luxurious beauty accessible for all.”
The company reaffirmed guidance, projecting net sales between $285 million and $295 million for the full year, with earnings before interest, taxes, depreciation and amortization between $61 million and $64 million.