E.l.f. Posts 9th Quarter of Sales Growth, Aided by Stimulus Shopping

E.l.f. Beauty has posted its ninth consecutive quarter of sales growth, despite the coronavirus pandemic.

E.l.f. chief executive officer Tarang Amin said the company saw spikes during the quarter that he attributes to stimulus spending. “Certainly the quarter was aided by stimulus, this last round of stimulus I think was by far the biggest from a consumer spending standpoint. We saw some weeks where we were up over 100 percent,” Amin said.

E.l.f.’s business ended the quarter ended March 31 with $92.7 million in sales, up 24 percent from the prior-year period. Net loss was $24,000, which Amin attributed to digital and marketing investments. The company also decided to stop building a facility in Southern California to focus on building out the company’s Chinese supply chain. “The fundamentals are still strong,” he said.

E.l.f. plans to continue marketing on new platforms, including Twitch and TikTok. Amin said the brand’s first livestream on Twitch had about 1 million viewers. “We’ve been amazed by the levels of consumer engagement on it,” he said. “It’ll definitely translate into sales, but how much we can attribute to it is still questionable. But when we first started on TikTok, that was the biggest question we got.”

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For the full fiscal year, E.l.f. posted $318 million in sales, up 12.4 percent from $282.9 million last year. Net income was $6.2 million.

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“As more people have gotten vaccinated, restrictions have kind of lifted, you’ve seen definitely this surge in retail,” Amin said E.l.f. sells with Walmart, Target and Ulta Beauty, and Amin said E.l.f.’s Ulta business has been particularly strong.

E.l.f.’s new foundation offering, Camo CC Cream, is selling well, Amin said, as is the brand’s Jelly Pop primer. In skin care, which is up 22 percent in tracked channels, E.l.f. recently launched Holy Hydration SPF —  “that’s already become like our number-one skin care product,” Amin said.

Broadly, analysts have been tracking upticks in mass market beauty sales in recent weeks. Amin said he thinks that is partially because of lockdowns, and partially because legacy players have been launching products consumers are particularly interested in.

“From a category standpoint, they’re not quite where we were two years ago, so the category is still building. The indices are going to look strong, but they were actually really poor last year,” Amin said. “I’ve been really encouraged by Maybelline’s Sky High Mascara or the new foundation L’Oréal has, NYX has had a couple really good items. So this combination of consumers being able to get back to living their normal lives and a good pipeline of innovation…is great for the category overall.”

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