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Despite Coronavirus Pandemic, E.l.f. Beauty Sales Jump 10%

E.l.f. has seen sales across categories, including makeup, which CEO Tarang Amin attributes to continued innovation.

E.l.f. Beauty saw a 10 percent lift in sales in the latest quarter, despite shifting consumer habits around shopping and makeup over the course of the coronavirus pandemic.

The business’ net sales increased to $88.6 million in the quarter ended Dec. 31. Gross margin decreased slightly, which the company attributed to retail shifts and expansion. Net income was down 46 percent to $4.3 million, which the company attributed to investments in marketing and new brands, including Alicia Keys’ Keys Soulcare.

For the nine months ended Dec. 31, E.l.f.’s net sales increased 8 percent, to $225.4 million. Net income was $6.3 million, down slightly from $6.4 million in the prior-year period.

The vast majority of E.l.f.’s sales still come from the main brand, as the company works to build up W3ll People and Keys Soulcare, according to chief executive officer Tarang Amin. And while color cosmetics and retail sales have struggled broadly during the COVID-19 pandemic, E.l.f. has managed to drive sales broadly, Amin said. 

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“That’s really been fueled by innovation,” he said. “We’re one of a few companies that continues to launch new products through the pandemic.” Amin listed the company’s new CC cream, Holy Hydration Cleansing Balm and skin care line and the Mint Melt collection as successes.

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“I really feel CC Cream is going to be our next big holy grail product,” Amin said.

E-commerce, where E.l.f.’s business originated, has also been growing. Amin said online sales now make up 16 percent of E.l.f.’s total business, up from 10 percent last year. “We definitely see the shift online,” he said.

“A lot of our retail distribution is in places that were able to remain open,” he added, noting that meaningful sales are still coming from Ulta Beauty, Walmart and Target, which he said has “executed extremely well.”

The company continues to invest in digital marketing, and has executed new partnerships with Loserfruit on Twitch and TikTok competitor Triller.

E.l.f. raised guidance for the year, and now estimates net sales for the fiscal year will fall between $304 million and $308 million, up from original projections of $297 million to $303 million.

Amin said that while the primary focus right now is on building E.l.f., W3ll People and Keys Soulcare, the company is actively considering incubating or acquiring new brands.

“We have our hands full with the three brands…but we like this strategy,” Amin said. “We feel we’re building a portfolio that’s going to position us even stronger coming out of the pandemic. We’re looking at other brands we can incubate like Keys Soulcare, or small, tuck-in acquisitions.” E.l.f. will look for or build brands that complement its existing portfolio, he added.

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