ELF Beauty Inc. raised its full-year sales and profit outlook on Tuesday and said it gained market share in the fiscal third quarter — a trend that could accelerate in years to come through a greater push into retailers with its lowest priced cosmetics and skin care products.
The cosmetics brand said it expects sales for fiscal 2024 to come in between $980 million and $990 million, up from previous expectations of $896 million to $906 million. The company now expects full-year adjusted earnings per share of $2.84 to $2.87, compared to a previous forecast of $2.47 to $2.50.
After hours, shares rose 3.5%.
About ELF by ELF Beauty,
Chief Executive Officer Tarang Amin said on Tuesday that within the color cosmetics segment, its market share has increased and could further double in the coming years. He noted that such products had surpassed others in popularity on the shelves of Target Corp. TGT,
a long-time customer.
“We are focused on replicating our success at Target with other key retailers and are making great progress toward that ambition,” Amin said.
ELF Beauty’s bullish forecast comes as consumers continue to deal with higher priced goods than before the pandemic. While analysts say demand for beauty products will hold despite inflation, retailers like Ulta Beauty Inc. ULTA,
they noted that competitive markdowns increased last year.
Amin said on the call that ELF products typically sell for about $6, compared to $9 for older mass-market cosmetics brands and more than $20 for prestige offerings.
ELF Beauty produces elf cosmetics and skin care products under its SKIN line at retailers such as Target, Walmart Inc. WMT,
and Ulta. Last year the company bought Naturium, a skin-care brand, for $355 million and teamed up with actress Jennifer Coolidge to promote a new lip kit.
The company on Tuesday reported third-quarter adjusted earnings per share of 74 cents, higher than FactSet’s forecast of 57 cents. Revenues of $270.9 million were above estimates of $238.9 million.