E.l.f. Beauty, known for its viral marketing and ability to attract younger consumers, experienced a significant increase in sales, resulting in its first billion-dollar fiscal year. However, despite this success, the company’s shares fell as it expressed expectations of a slower growth rate in the future.
In its fourth fiscal quarter, E.l.f. Beauty surpassed Wall Street’s expectations. The company reported earnings per share of 53 cents, adjusted, compared to the expected 32 cents. Additionally, its revenue reached $321.1 million, surpassing the anticipated $292.6 million.
Despite these impressive numbers, E.l.f. Beauty’s net income for the quarter was slightly lower than the previous year, with $14.53 million compared to $16.25 million. However, after excluding one-time items, the company’s earnings per share increased to 53 cents.
For the full year, E.l.f. Beauty’s sales grew by 77%, reaching $1.02 billion. This growth can be attributed to the company’s ability to capture the attention of consumers with its affordable beauty products, both on its own website and through retailers like Walmart and Target.
CEO Tarang Amin believes that E.l.f. Beauty is still in the early stages of its growth story and expects further expansion in cosmetics, skincare, and international markets. However, the company’s guidance for future growth fell short of Wall Street’s expectations. E.l.f. Beauty predicts net sales between $1.23 billion and $1.25 billion, representing a 20% to 22% increase. This forecast is lower than the anticipated $1.27 billion.
Ulta Beauty CEO Dave Kimbell’s recent comments about a slowdown in the beauty category have also impacted E.l.f. Beauty’s shares. Kimbell stated that there has been a moderation in demand for cosmetics, which was not anticipated to continue at its previous rate of growth. This news caused Ulta Beauty’s stock to decline by 15% and affected shares of E.l.f. Beauty, Estée Lauder, and Coty.
While the exact impact of this slowdown on Ulta Beauty’s sales is yet to be seen, the company will report its earnings next week. This information will provide further insight into the state of the beauty industry.
Overall, E.l.f. Beauty’s performance in its fiscal year demonstrates the company’s ability to attract consumers with its affordable beauty products. Despite the anticipated slowdown in growth, CEO Tarang Amin remains optimistic about the company’s potential for expansion in various markets. The impact of Ulta Beauty’s comments on the beauty industry will be closely watched by investors and industry analysts.
