e.l.f. Beauty (ELF) 3 Feb 222022 Q3 Earnings call transcript

Thank you for joining us to discuss e.l.f. Beauty's Third Quarter Fiscal 2022 Results. I'm Melinda Fried, Head of Corporate Communications. With me are Tarang Amin, Chairman and Chief Executive Officer, and Mandy Fields, Senior Vice President and Chief Financial Officer. We encourage you to tune into our webcast presentation for the best viewing experience which you can access on our website at investor.elfbeauty.com. remarks statements. our of many contain forward-looking Since forward-looking Please with factors the our earnings from that reports filed release and these materially SEC differ cause results refer actual to could to statements. where you'll find

In a basis. on information non-GAAP company's addition, presentation the includes presented today

GAAP measure. over Our release With me the webcast - that, Tarang. of the most between the the let earnings and differences directly to reconciliations non contains presentation comparable GAAP turn

the XX% of discuss of afternoon XXXX achieving everyone. Beauty on of two-year Adjusted Today, net million results up growth. holiday of quarter with basis. sales you, was our our team a $XX $XX EBITDA smaller net significantly QX consecutive Thank And and results versus We will program. delivered QX Melinda. good guidance. we XX% these of I We and prior versus a year. the for drivers XX% raised fiscal up stock sales delivered ago, million, XXth a am our proud e.l.f. year

reminder, full-year discuss. proactively our products, prioritize core our capacity back be container Mandy we which raising scaled holiday our to continue we're our high momentum, program demand. for continued to in With guidance, will which a As

basis Our on adapt performance. continue XX and to market a led In X.X% core fuel X-year QX ability innovation, points digitally at value up proposition, share our strategy, stack. to ELF speed, ELF at

cosmetics top-X by calendar to For a were color share brand margin. above we only the -pandemic wide year grow pre levels XXXX,

our imperatives driving across portfolio. our brand strategic five relentless on is focus Our results

quarter. the highlights me Let few provide a from

demand. drive strategic first brand Our is to imperative

traditional boundaries. business entertain driven approach find our This to innovative engage strong continue ways ROI community moving and beyond beauty We and momentum. has to

twist. some built views, movie the innovative created we TikTok upon year first-ever movie [Indiscernible] on recaps the press impressions, million TikTok season. holiday quarter, campaign garnered and This platform. XX Big over with million biggest trends mood an bige.l.f.ingcity The the XXX to celebrate of of native the our our

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incredibly celebrated the proud the on of The as the keyssoulcare.com. We're keyssoulcare.com. download celebrated buzz recognized with brand, been building past we anniversary to was Awards across over available timely XX we're album which industry by this also what year. with recently this We of having has it one-year

imperative step strategic second is Our a major up digital. in

Our digital up trends serve two-year digitally digits on a strategy well us consumption stack. triple led with continues our to

see and brick-and-mortar expectations, with and drove X in continue digital in business channel year of a QX compared our shift years We QX a between line as XX% to to our XX% channels in XX% digital ago. ago,

QX social On $XX over is fuel elfcosmetics.com, across growth. base approximately now shoppers follower consumers. Our XX% our our helping and in to platforms were million, new of digital

Loyalty Beauty party to consumer Our first data, to XX% continue has up year-over-year. now look the over over Beauty we'll for X.X ways million and integral as Program of enhance Squad Squad source members, an experience.

called loyalty The on XX% rewards to quarter of program KeysSoulcare.com. sales members Our Keys up this continues loyalty grow. Soulcare Soulcare made

strategic also their loved ones lead We while able to beauty givers create the imperative the and gifting site Gift on offerings. Soulcare Our first to innovation. a digital presentation] experience holidays. to is send a developed for new them personalized third and were video [Audio-Video Keys gifting

e.l.f. ability to XXX% free, concealers, quality with beauty which price half primers, success at to consumers. our our continue on centered deliver ongoing are resonate brows, and sponges, our superpowers in Our approximately brushes, cruelty Cosmetics segments: appeal with products points accessible premium sales. make broad up core

We're five at each. continue launched growth grail holy We sales segments of the QX number or weeks. in be online the retailer and newest position have of to one and end two proud coming shelves our in will which hitting all the innovations in drive

brows Camo price elfcosmetics.com powder our builds sleek success product the viral in Its and upon versus lax launched Grip extreme brow jaw-dropping the We lift equivalent, powder the and brow one accompanying of strength $X foundation prestige of We [Audio-Video at $XX recently equivalent in procedure we packaged priced an social and and lift and top presentation] grail. hold, applicator shades, lift it Camo way sensation sponge, in to value continue features holy [Audio-Video become strength media. a presentation] brow and primer already upon at upon The recently formula on for XX,XXX XX the primer signed a a with tools, $XX. mirror build at selling is awaiting $XX Building presentation] versus launched a franchise. a $XX. versus Sprouts foundation fans our item to in compact our effect. [Audio-Video for The newest its moment. a sold quickly products over $XX the and become are color equivalent category. at propelled to me This its out across prestige selling up that Power return. on lip ELF Our number sculpt consumers anxiously for Our clear a online Notify listened and looking attracting feathered

priced our a incredible at category on $XX. Skin They there available versus a QX, the transfer. grail major the brand our equivalent XX stains focus Skincare to lip e.l.f. that Skin was buzz top that glossy the presentation] X%, across to unique time consumption e.l.f. remains propelling four new first category. prestige was $X, Our for being before across portfolio. wearing up are to just social color at stain These retailers. launches We widely long a up into platforms even finish In ever. bullish compared generating XX% the the feature holy won't glossy are [Audio-Video remain and call, meet is

regimen and line oat initially milk three-part ingredients Pure elfcosmetics.com. daily developed, recently is the needs. Our free. out Skin niacinamide. a vegan, our skin Pure line and The Dermatologist cruelty Skin like to sold nurtures consumers designed clean, launched Pure on meet Skin ' with

PEOPLE our launched skincare also online. We collection WXLL

this PEOPLE This derm-developed stores available is start Beauty line as And in Target ranges. quarter. plant-powered, of spring. and progress Ulta Skincare With we're category color the will with top-selling in The to more now well. be inclusive Beauty. WXLL we're skincare our available shade products with in the proud Clean in largest excited making products. five Clean also We're

performance, shades. our shades. and Bio We extend extended Concealers wider to audience. Foundations shade to products a clean ranges to XX the to moisturizers WXLL Tint And plan XX available Bio Stick plant-powered, Our bring PEOPLE further both Bios in high

Keys in Dry to innovated the Polish, Energizing Body: Mind Soulcare, Clearing Turning your praise three Body offerings body Brush. and new Body category we Body Balm, to Melting further

products core continue Our be beauty lists. award body coveted care to named to

for and XX. Sugar included were Cream by we our Innovator Body Best award Awards Nourishing Sacred Oil. quarter in Refinery Rich and our Beauty Beauty Celebrity This recognized for Pop Body

ever. our also believe kits. imperative our our our pleased this and core impactful expectations. is quarter our merchandising visual resets, and we're products of We're consumption with of more which season traditional is more the during rolling Productivity bought innovation our fourth out quite ahead partners. than We Consumers was holiday driving with productivity of with strong weeks. strong lieu spring the Our coming our is space in expansion strategic in retail holiday

to continue space see opportunities. We shelf

our expanding U.K. XXXX at secured space As Internationally, International and previously with spring. the subset Walmart represents in of doors. we're their the we're in of expansion space business Superdrug pleased CVS, Boots XXXX, with of fall whitespace spring our we've reported, major a in in with and XX% this just today. shelf

the growth. in gives up the only performance further e.l.f. Nielsen XX expansion. geographic from confidence XX The Our U.K. data to last on be to number X, and number ranks top at latest continues year, brand us post

partners; to Europe. UK, countries online our in the announce limited wanted This We're partners inspired also what selective elevating Beauty, the Soulcare's Keys cosmetics the with Sephora. Ulta XX line year's that and We the be differentiation be indulgent, Soulcare into at gain and featuring this launched in our XXXX. Keys Beauty, Beauty community by Beauty's stores will products. newest retail and XX-piece Mint drive entry X continue and its with We'll in with retail Sephora. our Dreams in countries Walmart H for brand Dreams. excited skincare and after in date success gloss. Superdrug first Cookies global this in will retail ELF the Western and strategy. U.S. a Beauty retail Ulta is We're of next, And with PEOPLE to and Cult launched they available Cookies launching Europe polling across partner, in we Canada markets stores collection. collection major subset and Melt WXLL and brand edition exclusively the UK of the four at We've to in accelerating last [Indiscernible] in first placement our with U.S., an in Sephora marks spring, spring in in pleased

Our fifth delivering to imperative brand savings is strategic investments. help cost fuel

facing congestion, many a of challenges. Beauty in about we've like and we costs. for I'm e.l.f. and container is navigated and companies, we're port these how As spoke slowing which global transportation team increasing the our quarters, shipments other imbalance proud recent

Our excellence, operations executed at around to sustain rates managing SKUs team has level store XX%. with in-stock the

around to These mid-March. We effective and supply price the the on chain inflationary uncertainty decision long we prices our will environment, how increase the will increase portfolio, made of the Given challenges the persist majority PEOPLE. impact our as certain our balanced WXLL SKUs, and well within approximately two-thirds with costs as offsetting Soulcare of the proposition Keys maintaining e.l.f. value consumers. Cosmetics approach between items and elevated

deliver broader on While this price rounds, of e.l.f previous to unchanged, products at to pricing round an remain points than extraordinary continue enabling high-quality value. us is opening our

I WXLL PEOPLE update Both the clean Before I brands. call Mandy, sustainably-minded and to clean launched Keys turn to over and as on and our give efforts. are an sustainability want Soulcare

Over the use the SKUs ELF reformulated ingredients are brand. not There months, do on on XXX several past our X,XXX team over list. over our now

With While and premium clean, excited at of these can points to existing months are price vegan, accessible have to superpowers. to products we're beauty a quality cruelty add it ELF, will free. take clean roll formulations number new for that our out, consumers

eliminating this milestone since more multiple sustainability XXX packaging the another Unicorn On packaging reached quarter than is for Unicorn, streamlined explore X Project more of with initiative. categories. materials. green materials adopt million across SKUs we in the even launch. Project pounds eliminate focus We're sustainable to Unicorn environmental evolving a a corner Project Green is and long-term Project packaging, practices, friendlier Project with to Unicorn front,

we're and rise to to this continue now in Beauty I area. Mandy. that and will practices importance, clean I'm turn sustainable the excel will in Our e.l.f. glad over to call positioning

up two share fourth a benefits I'm into we fiscal up on is mix, savings accretive XXX switching national net expectations higher and quarter XX% approximately This years XX% compared Tarang. as of to XX% the basis this international strength basis. cost saw was margin margin into points stack products. XXXX versus year. margin million, and you, on up from guidance. to retailers. by and quarter driven Thank away exceeded highlights We year-over-year Gross QX our gross of of We specifically an consumers delivered core from prior strong in the and third trend $XX a XX% our X-year year, results raised prior head pleased holiday XX% Consumption kits encouraging quarter. and as well, sales was and our strong stack, up up margin from

flow in benefits partially on from offset These a than We increases price expected. and previously the margin which by our elevated skews P&L implemented we gross May. FX subset rate of lesser a transportation through also the benefited were costs, at

of Given of XX XX%, in XX% slightly on and investments flat the percentage sales On SG&A The year. gross versus was up flow-through an digital. ahead mix, last digital year. by costs in sales, back favorable increase as for net of points mainly for the these we margin QX basis marketing expect to overall adjusted year. of rate come quarter basis, to investment prior was freight a and approximately and the was Marketing approximately last driven now half

sales $XX the was share was or net share to and XX% was approximately diluted XX% We $X.XX or come $X.XX million million, $XX to net $XX expect margin million sales. EBITDA adjusted of Adjusted XX% and net of diluted at marketing a to digital QX year. income per EBITDA continue ago. adjusted year per in compared for to

approximately remains million. liquidity and on in balance with cash We to hand quarter of ended to the sitting credit $XX of $XX at strong ago. $XXX a a cash Our compared with million our million year access balance our cash revolving facility, the combination

reducing complete credit $XX Our million debt our current down quarter. our by facility, in a pay revolving reflects cash balance of the overall

balance our compared $XX $XX line Our as expectations million was in ending inventory million year with ago. a to

carrying times, quarter, transportation combination to Soulcare continued levels costs, our higher and WXLL addition As we higher due the the lead a reminder, business longer Keys about of and PEOPLE, of momentum. last spoke inventory

We supporting investing five remain on to imperatives expect strategic our strategic cash priorities behind our and extensions.

sales guidance. approximately We Now up XXXX XX% let's expect growth now from previously. turn net XX% to fiscal XX% to our XX% to XXXX, versus of fiscal

We $XX and million of diluted XX%. expect and count million between and adjusted XXXX shares. tax We adjusted $XX approximately approximately to fiscal $XX EPF net rate per to share. of still EBITDA between million, adjusted a $XX $X.XX fully income million expect $XX million $X.XX to diluted our And be share XX% adjusted

Our QX largely QX. outlook and improved in reflects guidance relative our raised outperformance expectations for an top-line to our

QX stack throughout business Tarang our strong X-year expect basis not XX% approximately on a our As most QX, to to stack remained at mentioned, program, momentum up similar holiday X-year XX% of on Despite we basis. having QX a look growth.

Nielsen to and will as round has net of we to fiscal in we largest be In sales, well XX% as XXXX, spending cause of as we posted numbers see continued reminder, as related the our imbalance stack a result. comparison Nielsen data trends. during proud and navigated the how are on container we're to adjusted a sales of the environment. raising $XX date, industry-wide dynamic those anchoring million, of given lapping As respectively XX% ending what in QX cycling in you'll next a seen our noted, the XX% these channels, just in into X-year QX year-over-year. up expect growth million mindful the We're date. weeks these April our we've stimulus momentum, of and it capture year, remains in to to elevation our and This tracked and logistics and remain implications four we team XX% volatility We data. I on March That to $XX periods. Therefore, a better expectations EBITDA has said, cost to

as to fiscal guidance as in better fiscal the pricing the discussed in help actions elevated and consumer expected impact about XXXX us Overall, next allow more As color pricing market. XXXX. to will performance, call, pleased XXXX. our costs time few This and will May. opportunities month in inflationary for we the response reflect in we take a when fiscal provide believe we're pricing QX on We these our shipping ahead results to we're with it of retailers which on provide of should are financial impact earlier weeks very assess our our the mitigate we the actions pressures we for enter excited plan taking us to

basis to the confident performance may potential Operator, the call our we questions. to category, our open on relative both five growth are that and XX demonstrates last driving in the remain absolute for Our imperatives strategic an portfolio brands. you of results, and quarters, over With how the long-term

time, [Operator will Begin At roster. the question-and-answer our pause this session. we Instructions]. to momentarily assemble

Our first ahead. question is go from Andrea Teixeira with JPMorgan. Please,

you. to Tarang innovation Thank your another and Good have Mandy. a I one distribution. afternoon to on congrats on question quarter both and and

Keys the expand U.S. then And it's costs, inside of in pressures entrants we you've and for see more international in marketing, and and function Sephora, And strong top Alicia's flow you? raised for a just timing doesn't to EPS. great conservative happening Thank guidance Canada, that. the but of obviously Europe, moving on again, Tarang, distribution. there or Is to or labor to following? what's the First congrats appreciate given the Soulcare you. done on this pieces into of cost plan it Mandy, obviously, Is the a ahead given the course all being these a line, of

Andrea. for Sephora a Keys Sephora pleased brand, U.S. Sephora entering see We've On question launch definitely Soulcare, Canada, and on on partner. as potential the in your we the we're including afternoon, Good really future progress hopes our high Canada. with

Ulta Beauty bright, distribution And additional particularly prospects we're Canada. As still reminder, level in engagement I so quite we're the the with of with period in given a Keys of seeing are that the we think, the exclusivity on with starting Sephora are brand. U.S.,

oh, follow-up Andrea have you on a answer your -- And did then there Keys? Andrea to question,

on On Mandy. e.l.f.? in-trend, I'm separate because I and I to I side-by-side Is going Thank the follow to display. be it's -- WXLL will just to skin that or mostly saying assuming going it's e.l.f. just it's if a from itself a entrance it's you, that PEOPLE be was Ulta, may. No. shelf up separate

distribution a is and the PEOPLE our store. placement within program that brand. on that our line been within part innovation merchandising of the on no, about our re-branding first momentum of we -- after part separate This Yeah, dedicated as a as different their brand WXLL have e.l.f. Ulta incremental as of subset And e.l.f. a -- program well, PEOPLE vehicle. quite we're Conscious to the PEOPLE Beauty Ulta that Doors. on again, have as the is given have the in WXLL WXLL well in we Ulta excited

you. Thank Perfect.

raised EPS. question then on the flow-through guidance and on And your the EBITDA and

So the on up XX% the XX% million, million roughly to beat essentially, we've EBITDA that's top And from taken we've so roughly guidance million, million EBITDA QX to our $XX million flowing up to on and as from XX% full year. $X.XX on line. top to top well. the line we million, incremental $X guidance million raised our XX%. $X most that through $XX to And $XX.X to up end $XX of by to on the so are on

we it I'm so year, to headwinds So great that translates cost Actually, really on proud seeing, XX% to guidance. the that XX% really about we're with the even EBITDA expectations. EBITDA growth feel our of

ultra Is an anytime? some just back run out, -- going sorry to -- you that that. And that exclusivity then runs it may the do exclusive, when for out

the certain we terrific continue Ulta we Beauty. in the It point. brand at partner They've supporter and will launched run U.S. as with a Keys to discuss out with Soulcare Ulta. Obviously, been a

exclusivity some And an that extended will run and whether on expand we'll think out whether we Keys point, ongoing we to distribution there But at evaluate so, I conversation. or Soulcare. will continue be

around. pass you, Okay. That's I'll Thank perfect. both.

ahead. is Please with The go Steph Jefferies. next question from Wissink

two well. everyone. Thank you. Good afternoon, had questions as We follow-up

it's Tarang, maybe is -- best you. first for pricing. This The on

the and you. quantification gaps gains. wondering price thinking also domestic Any then little on price to prestige planned to gains those comments can gap I'm pricing? much your mid-March update. calendar share you're us through CVS how with even if how might internationally. market your curious the bit space about that Thank you Can being around about quantify, you Walmart maintained year. with benefit XXXX prestige think a help and in Just on And

Sure. Hi, Steph.

the similar approach And a product, gotten that so proved we successful, which on actions, the really on. have, most just is pricing we're examples we've quite look of SKUs by in of we a used that pricing couple So comparable a product and the lot at we a the SKU launched. using look really at I take XXXX, our SKU where very range, prestige things when you power of a will you a give taken

the new of is core on a item Our $XX. power on our already grip as comparable grail. There's actually period big our $XX, elfcosmetics.com. or priced primer, quite item top item That's the still which top-selling holy call, many at prestige other I talked is gap there, are selling

many our taking our price. on Equally point pricing up is of each up items. we're approach taking So $X opening products not those many price important, in of

the many at that the price that remain items ones we extraordinary $X, have $X most of our on, So $X, value point.

where value So saw peanut well things did the our U.S. margins. we in pricing, limited feel we while butter even is pricing the it broader than And strong equation. our much we took on more aiding after also really allows with feel pricing. a maintaining we that into approach increase. in gross have focus that quite I'd pricing International XXXX power, XXXX back us great better call we the general strategy to It price

to value gondola of the always and to been the but with I space the CVS really a had space are on but that the give your it tell gains. we're the with we're second space feel color then not space, and a the gains, in percent increase foot space, little gains. doors. X we we We mid-March. bit extraordinary going pretty sizable of to space we in of you in X-foot end given that on take subset gain cautious have, from well-positioned for more their productivity went a pleased XX you one on pricing quantifying cap We're So pricing, we've a will And

subset gains being And future currently of in space. feet well resets. CVS. of as doors their continual a within a Walmart. pretty spring for set those then bodes X their of Boots again, right of And Superdrug Walmart went and it part within have sets in both had many increase now think good to is I space

think, building there as of gains chain, And well. pretty kind for so, I beyond also space we're up seeing sizable

that sales quantified I'll on space making will track May. that we of haven't be spring that now. work give able percent when set our going aid have color our in currently we perhaps harder, Project, more good excited and to being is FY guidance you, about with we've we focus tell got the that Unicorn So and productivity, are our record What particularly give on sets always to Green 'XX that being I'm right our really now, that first

you. Very helpful. Thank

next ahead. Stanley. is Morgan go from The Please Mohsenian question from Dara

Good guys. Hey, afternoon.

Good afternoon.

see from category thoughts can if stimulus year. discussing this And growth Perhaps, fade. consumer growth Tarang, Any potential bit category category also, on fiscal then, far spending. spend fiscal consumer you in impact on if category, of So, beyond calendar to growth around and trends perhaps, maybe spending do cosmetics risk we there's And that some any benefits QX? support time so a update here? weaker weaker as e.l.f the just

Yeah.

the was on where six of saw bullish levels, category. a in very results consumers at remain weeks And had category category when levels. six pre was seek the pre now, -demand I its terms category the mixed look seeing it where category. QX, sub Dara, behavior. is more the -pandemic right moment level, in Even on consumer Lip weeks we're say in definitely you the I'd So positive. is the that color. we overall above below We having more trajectory But

segments. seeing across we're core all our For e.l.f. specifically, of strength

where the share as number well have So or within sales segments as We're skincare. two one of I and talked growing five position. about segments, those the all we five in

category our consumption mentioned XX% plus a up was e.l.f. nine. I quarter was the Skin that for for As versus skincare

I a I'm category So from what like standpoint. seeing

within are I In environment, feel spending, kind well-positioned of terms inflationary of of the we consumer that. the particularly relationship

I Particularly think And really growing that on X even portfolio which major feeling a the think now, the I much bullish cosmetics the our regardless only Skin, richer over years, quarters, we've category. not we to XX proven for color skincare, continues with between last and whitespace was. better business, us. to WXLL consecutive category presence where I'm opportunity even relative quite PEOPLE, Keys have then and Soulcare, be e.l.f. a given

chain, your on in can terms give And then and see demand of in and where Great. were forward if service continue strong us to a you if the able forward consumer to you there going bit update stand fully you to supply demand? thoughts you ability supply quarter demand any of that

for lot I a taking times feel of that the maintain able holiday great installation migration our lead saw And margins. levels, before, a our items kind good talked seeing. in core gave that in products, do as year, has which to lot made XX% us also up of about decision. inventory do of from what a very that core We've longer foregoing were earlier be We the forward, kits to in look the And we kits aided stocks. quarter. our proved on we we're our really able to we're we the to which gross with proactive to decisions

So I year. better. And get I our supply feel now have better about during to time our situation continue any feel we at I than fiscal

that continue we're lead been seeing have deal demand ability our strong. confidence the volatility meet which others great times are still of But normal think, longer I has Now quite of a experiencing now. right we to that, and

Great. Thanks.

Tong question next Olivia from ahead. The with is Raymond James, please go

Great. Thank you.

give few to from and upside that quarters. revenue this over if price understand just what efficiencies. an a impact helping to next your take. around us on or quarter sales the of range finer drive Maybe by you question give if on seen First cost you're sustainability idea and is range can point drove planning to of the And us any the Omicron a increases you've ability of January the Thanks.

Olivia. start, I'll

side consumption year talked, momentum the That quarter, expectations exceeded revenue as really which improved the our the kits, had back holiday upside core very the on for business from scaled really of program we core foiled this has we On our our shifting consumers a product. QX really, in well. equation, as and our expectations QX into

up basis So, taking both those top be as in well. going is very sustainable the well. expect the two-year a And to to half second guidance better from outlook end we by is think trend on quarters, that We still is strong for for the year. guidance do evidenced stack us, our a that -- XX% flagging, QX as on

In the terms two-thirds it also Keys in of portfolio, and about price PEOPLE we're in round and of portion increases March, of that of that a as includes price WXLL covers increases, well. our this it taking

pretty Tarang really maintain our with to earlier, broad increase. value for a as it's balanced the So consumers. wanting that proposition But mentioned price

we're not continue -- to proposition really our touching points and opening to consumers. So, stay deliver that sure for value want we our price make that

that's would terms the to Omicron, say In hard from I of given parse moving out other parts. data,

from now what we're we saw think with seeing impact versus an on of earlier more Omicron. I Delta

you're to the spring in Camo is about that Camo mentioned would lot see strength I foundations. one our continue excited gives a a Primer, innovation. us the standpoint. the well things the of consumption then business say bodes Grip Franchise I our trend with on of for what And from going It to our other particularly building of Power confidence

glossy moment as is Even stains. now, right having a lip our Lip

phenomenal line. our well are equivalent, relative them as prestige values to Skin All Pure of as

hit seen we've website our so hopeful really Spring good own are sets. and results really on as they And

driven was Now volatility consumption see in you high. March as Nielsen data, we saw will said. The we April the in stimulus and quite some that

but the noise overall for well we of might I actually data, think than QX the year. stronger expected there for Nielsen and be what fiscal consumption in our bode trends So rest some are

basis? That's a that the just how promotions, then Thanks. frankly, strong your quite run helpful. to change And kits December magnitude that type in how or how do years, was, this holiday on have other term want way longer in view you promotion do extent quarter products to any you and the to future run does given longer-term to on or

nature retailers. holiday with some with really pleased carry role, in products those kits. and saw have them really gravitated towards there's focus we're will able consumer a learnings have on future engage we our year. excitement, of holiday programs. and consumers gross is, we're our we And into bigger this at a core a products. we longer-term, And Those definitely to say forward that I But online particularly what think will key much We They some QX as I'd of come see them. Yes. margin. better still the

core, time our And plan for being, the kits so more on to much some will focused our is least -- I the It excitement. with think for that future. at our be drive holiday limited

you. Thank Great.

go Chapell, The Securities. Please next question Truist from is ahead. with Bill

afternoon. Good Thanks.

afternoon. Good

Hi, Bill.

just bit what learning platform? maybe years that's of this Will question more First look future a continue from I'm it that for I a you've that you into looks And on right. we're two what end, deal. XX-months you trying little Just to on of in or has think how expanded to kind understand guess learned, would terms bigger M&A. like I stuff size here?

with really platform. felt the value was of in powered, acquired clean our We a we lot thesis add people. of acquisition with a it And brand, Bill. thanks, the Well, well to there, We're beauty. that plant brand we really pioneer could both real pleased Yeah. the innovation

And a XXX where feel we Snyder, of SKUs avail both progress a out, our distribution launch its complete renew We kind standpoint, the from all and we marketing do innovation a consumer standpoint. a We executed the Dr. of formulations months of PEOPLE Soulcare brought WXLL is our a we great brand, with the to They'll into innovation PEOPLE, very on to PEOPLE have roll now but e.l.f as our -- where, clean. came terms real learned. few we six we've WXLL co-founders WXLL one and in from WXLL are of Renee skincare, certainly PEOPLE, in She and really a got over re-platforming getting momentum. clean months knowledge of the footprint what ability instrumental for PEOPLE board-certified WXLL last clean capability we could really gave knowledge PEOPLE to much, WXLL plan. did and a a PEOPLE us us the beauty. the that take what of Keys addition, against dermatologist. almost reformulated lot was was team WXLL brand, presentation in brand good seeing We energized program, re-branding we're

we to future of we've the capabilities terms bring well don't In created as interested similar in continue that bring incredible M&A, I'd to onto a as under company construct be say we as other into the have platform that leveraged being can brands platform, able here. we

get to we I can small acquisition, scale, integration as want going. it WXLL do of disciplined. did the highly terms when sure and first we're would We was our the plan PEOPLE In say, intentionally make we

them final the look for target was for not you'll There some you to we in future but a look submit larger, mean, at, a to in -- we're did some disciplined. notes bit. the bit I be costs a highly M&A QX. at adjustments. a take As It a but we of were we would see acquisitions, as looked

So say, highly of top we at. the appeal I'd remain on the only or to brands, what we in other things line. us that And also terms line, the bottom on not look high-growth but disciplined

company bottom of a a in profile great and able have We both as deliver being line. to terms top

the or an to targets. company, different bring I'd potential adjacent capability look remain we'll either priority. would portfolio. so open at portfolio. But any something taking And our but remain first that great That's that. feel a say have would We that, disciplined existing that acquisition to category our And a then target again, complement our potential in something would about in we

Thanks just for color. supply that chain. on And back then

you seeing get you forward still months feel most is supplies, bumpiness or Asia, Now supply moving that in is getting that there we're still risk the you the worry shipped do behind the getting some next most over of through about? chain you that few from and containers, like holidays terms of and

from about No, good say we been I'd risk to the feeling supply containers a months, say would we've get all the chain standpoint. able I we're over few wanted. the last

at capacity, are that's in so highly with us do cost. is some confident expect But we Now of elevated will product, seeing. for to of availability, to one was for of ability an us our pricing they we're one to our costs It we be reasons that ability those time, the the some of our take impedances that priced. decide of in we're elevated to and terms get overall meet demand coming

so Thanks much. Great.

ahead. with is go Bolton-Weiser Davidson, Linda D.A. question next The from please

Thank because very little and drove this you it still forward what even you margin on that was down of to And strongly. price, margin level gross wanting taking detail fluctuate? spectacular mix talked holiday margin you. explaining something more go. because Hi. you so it or new higher be seems out you're about. to it gross any or much And quantifying a to so came quantification it is just accounting expected was sequentially? had going gross up even I'm than But more has that it to was up going really expected is that Is the me a the or the it that better bit for performance, issue way there

into product on actually holiday One, benefit I is core Gross margin think, that drove at in we us a our lower holiday in that things. than expected what a I talked from say at margin, so a quarter, The the core having shift take not product Linda. would into basis. question. product two we mixed. better year-over-year our came as Hi, people I'll shifting for the

So great see. that was to

impact part in we're out higher P&L is, way we a generally, freight costs, better I the the that seeing expected. we're little even think, bit mixing with other The the not

gross to I've And year. expect out so, why for the that flat margin that's last we second half, called now to be

coming versus year QX. in bit down implies a that little last So

-- that numbers, our from improved perspective. those not holiday that think mixed but we on won't seeing have because has what I benefit based standpoint we're just that in a So outlook from

pricing In we'll any once margin, of May. to terms reflect allow gross how to in we give fiscal a pricing get responding before more in for our to real XX that further impact market we guidance We think I given really and retailers to that's color feel the give go have our on there. on color want for the time how consumers are going and

Great. of performance? that down harder the quarter are year ask still And a 'XX. the a you the hard guidance, prior the guiding But FY can bit in comp gets top-line According against to fourth half I year-over-year to for little even first about comparison.

drivers, things how is Soulcare qualitative that comparison in Because the going even think very should how a to so got going should maybe that a though fiscal 'XX? of half think the in of other of expanding generally in So on, Keys get lot about you've and that? growth first harder, we we way, terms about

Yes.

that's So guidance let with given what start because for. me we've QX

number. or QX on stack So really anchoring a two-year

XX% to negative strong, even then for on fiscal little it's XX% implied. of a a look basis. two-year is on it's north still still on full So what it's XX% basis, implies when at X-year of bit I year guidance 'XX, up very a stack your the point, the And QX, the stack but end, top

overall strong performance. very a So

what continue to fiscal the to for into Tarang's when before innovation. again, we But give signals we're of on can year, very we spring feel first guidance half of in our even broad do I what next into be we say have earlier is confident that going to it's we're terms expect strong seeing wait In distribution. that, to will until get just 'XX. points, The that

Our number primer the on is power elfcosmetics.com. item one our grip

very volatility in But data, and at expect So things really really that's think April, We seeing and all in still remains reflective be feel I of it volatile as -- momentum. March there, don't core very results consumption strong signals some Nielsen that we may strong. and there. business some about, our so that positive talked we

much. very you Thank Okay.

Linda. Thanks,

go ahead. question is next with Please Chen The Cowen. from Oliver

our taking Oliver. Joanne This is on for questions. for you Thank Hi.

at especially Just think Soulcare And Soulcare momentum. curious, gaining XX% balance a care right space retailers? as lot you it XX% much. the you But for to so I starting question know And marketing Thank another looks really like of is, between with e.l.f going Keys think about, you're and you're that's how year? different is level the you do lapping skin to Skin cosmetics launch. range expecting forward, care this shelf spend do Keys

the of take that I'll Thanks. first question. part

brands. the trends a was a top our consumption I also are skincare, for skincare of it that was we terms us. In quarter great milestone Skin quarter, first good for XX e.l.f. seeing That became momentum. pretty mentioned the

skincare given shelf where has we've footprint. would do to in. of products. the terms space we seek most varies Skin And We're and by it is other our probably we well In within us set. business in Target, with. At get shelf customer longest greater our given say and under our in developed us how we greater they've skincare in we pretty as skincare biggest space, our I dramatically the have able over that us sets incremental Target opportunity I'd is space, time customer. been retailer e.l.f. given say get we of The skincare space Beauty, existing more as as their Ulta to are shelf more way and many space at for business has assortment of every basically, much manage manage skincare more

a depending happens integrate we'll with be it whether within spot. we set, so separate look existing there space in over e.l.f. we in where taking do it on time, our And what keep a

of more us our that's learn is. opportunity theme into way to retailers, continue we it even and real as pick to but more more what going space, to we're Skin more get unifying think is I up our the our focus innovation there, and So gives other

And spend, that about feel then on to XX% your range. question great on we marketing XX%

to desire this ROI year. marketing our you've as high level of And investing us and digital support to with seen investment. We is see activations think what in I just balance us have of from number really that EBITDA, do continuing a that grow you'll

right that XX% so, feels right And to to XX% us now.

Got Thank it. you.

go with Jon Blair. ahead. from Please Andersen William next question The is

first Mandy. Tarang. the Hi, on Congrats the quarter. elfcosmetics.com business. Hi, is Thanks. My about question

Squad Beauty is your up, year-over-year. XX% mentioned, You membership I think

support you've of you understand X in are How importance that what a Just of to you targeting kind helping And data to done data approaching efforts? members. provides. you better that Thanks. first-party trying in kind talked your and first-party past. of or a million do the You're maybe conversion big the or faster that's using than enhance the picture to way, Tarang,

Chipotle on We're We've the particularly the partnering program that our it's with come think challenge, TikTok, X.X of often our Squad A experience group John. we're [Indiscernible] Beauty the consumers XX% program These members Squad up million critical users. #elfitup. user for I year-over-year, about us. is that be to it pop the hearing In of excited and X insight e.l.f./ of Program, the the future hashtag billion have, big Loyalty of all are challenge activities. Well, that do inspiration Beauty we've next from base that things after XX% a They Hi, one collaboration wanting. what placing talked but on up hashtag the our or the our latest now many the I'm and core for inspiration Fuller week for that finding right sales unique is proud the the done we elfcosmetics.com. is we for whether growth core lot Simon generating there, also a make we also are source and collaborations our do, of various of about that views. our core

brand, is also they shopping in. of from some with them the points things not interested behavior engagement of our the So of they it's the Part we new them. most insights just seeing engage including we're that on that are standpoint, level earn products, how the including but

functionality to see really drives well we the that build program, that including got. in Because dataset with additional drives beyond elfcosmetics.com. of it, us and retailers. international continue nurture you'll it enhance It So all activities, our really in

little have in are that implications are that mentioned the the you bit, out. consumer kind to quarter digital to year I think has margin plays earlier XX% me, unexpected, the digital margin in XX% portion come as of versus That's implications? remind business Not does given there guess, respect I the behavior a of helpful. With shift current -- a the Or that the changes. makeshift down -- But ago. what that channel

about by to how margin, talked and line. really a time gross of operating things It like so it benefit we We've neutral digital on the as a about benefit Yes. the a shift some more that. It's be that. I from a margin the would into think pretty shift impact margin in gross digital. warehousing is before standpoint. But and add marketing a in you That's

expect? balance position think the out for Mandy, initiatives purely Is strong there's fill around using one very Great. in reinvestment brands is That's M&A -- How on trying own? versus helpful. five within I the to do targeted things opportunistic should we that three sheet, a capital mean, adding capital the looking some of balance to the the extensions, applied portfolio? kind pointed maybe And side? strategic me Thanks. you you're on of sense forward. the the supporting it portfolio in. Last you liquidity you you're Are the just going about strength your how brands I'm for get what for management. the liquidity or

Yeah.

strategic continuing So absolutely imperatives, extension on We'll then right, our focused those. to the side. also Jon. on And support and strategic be you're

so. color bit of continue Tarang to gave looked little do more a and around, so And we at have as recently, targets we'll

allows or us. up category capability think new capability different would or that us into like be WXLL us I interesting adjacencies PEOPLE, to anything picked our brings we've the that with expands go to

are great We're of such in current strong to add a organic our portfolio. -- to we think have thing rush is I the portfolio not we across brands. our growth that

disciplined after. We decide go to we will for be brand very choiceful and whatever very

us. super And where see take and and and so, I we to move be are but to don't quickly at looking of important from things, think, to that that on look only you things nature and not that want back something sense, a makes us, continue will cultural fit, it. to going it too We're love

area. PEOPLE small. in are And was as very this intentionally we Tarang disciplined So mentioned, WXLL

our with and bring As bottom bigger top and line expand bit a into the scale, we look really we may line than looking more with that, at acquisition little forward, something portfolio. other any things to we that look are that

the of the said. strength The be business Well ability to patient. you core affords

So very thank Congrats it. you much. Appreciate again.

Thanks, Jon.

The Nicholson ahead. please Citi, question is go with from next Wendy

Hi. to on follow questioning M&A line on up I front. of wanted just that the

independently. and operate about for Mandy, you've great. will? that feels just of in the each these managerial then is just got to think I has fingers while up. The it a Tarang it's PEOPLE you they you me, can discipline tentacles not and think making, in and and bringing I brands, you're like your you brands little really you're ramp But WXLL bandwidth, talk incubate taken acquisitions if like

going helpful in just -- that story because got you how clarify or don't you serial is as and a you of it and be because focus forward? to too is much obviously you that broad the is of just would on I important lose you yourself too it priority afield core much not the I risk bigger is a part too if of will. there's far you to So going and think think a acquirer, that you terms I get think on a of expand how

to So M&A can you right how clarify is now? you important just

both focus pays whitespace this tremendous Yeah, on that is bills. and and one. e.l.f. is a we Wendy. core the would say I'll on; our e.l.f the I cosmetics skin. thing predominant have e.l.f. of our amount business take e.l.f. all

vast managerial attention I'd is the on our So majority say company of those.

way similar we experience us consumer other I've then very part managers, brands, have we've consumer-facing terms the have. it. for. our that sure is we kind extensions, the we of distinct been in. with have manage them that and associated talent But brand resourced of multi-brand In of strategic chassis of those environments make to the of Most rest of They the of innovation distinct brands leveraging portfolio

what a the we on area We of chassis, serious to chassis have the done, the seen obviously feel same the standpoint, standpoint. from any that and with on brands where managerial a own. platform, innovation operations our terms focus. sense, manage we've been on from we've their But over years them biggest without ELF focus be last where take let strategic extensions makes momentum see live to three them an But becomes able issues in few the leverage well, able then our you incredible we we and of like more it a brand could we've

in hand, of we're terms other able to how what do. go-to-market the and On they

that reasonable, the in that's terms of enough But certainly. I the question pays Fair enough. e.l.f. Fair other had statement, just belt.

exploded once upon has Just margins? have? prices pull just of mean, you days it's flexibility your the visibility I a promotion? e.l.f guys much how you you're out brand that of done phenomenal raising you the In just Obviously, feed pricing the that to back everything brand you and I you react too step-up awareness protect willing start share can do share job bit you're know cash on side. on have you've I relevance, quickly to a What's much consumer if brand-specifically, e.l.f. or but on question some innovation the are cost-driven, much, a little a think, the in pricing remember terms flexibility to to you erosion? How I see pricing. and some market that in priced taking do contemplating and the at$X. the the time, how or

This at power. we that. has back market Well, so brand successful. we share had share XXXX not down. quite throughout we at a like and market mentioned concluded big gained we definitely e.l.f., $X that that price in quickly too I taken quite speed everything fast. is increase take was to actually had a back quickly our we up And move did that In increase, some which we items react can pricing you lose I'll rolled e.l.f. that And price we price and was increase, those process,

ourselves certain not afraid to overextended we we very back to us adjust experiences. the easy to they items, those so we and found items consumer on on what what be And where if move. based it's can that We're say need to -- for

it category prove It's We've continue in bad relative we'll back. market good went Now a by to see But way is intention a to we able and they if market too that But easy which far market, key approached this, a we've roll even how we portfolio, to our improves. there our, a segment we're these, up our item to go hope of its to gain the as where on. for want we really us found is item to that of see, do. each dollar we'll looking been can enough the is to share. And is our do going that competitor. on

so And feel pricing done we be tool right, the. good can in a

so much. Terrific. you Thank

The from Stifel. Please with next question Astrachan Mark is ahead. go

everyone. your Two you if of sales in Thanks. questions. look the last in quarters growth before was you a we what to help bit I understand trying One the track context in at reported the decently couple the quarter, growth? could Afternoon, versus us is, excess that in un-tracked the saw of think December scanner data.

account into step. holiday quarter, taking This even it was the below

slower the overall scanner dynamics in So relatively a bit the sort versus think that? of to to the quarter? about growth drove What versus can in numbers you un-tracked of the talk how Thanks. December data

this quarter net we what base year a and really consumption. both function The difference sales the of for last saw is in

So two-year what sales When remarks. stack down bit I net more last line folks which XX% in ahead posted the is a that's I XX% up Sales pacing in we growth with and consumption. consumption, QX in X%. year, you on to expect see. take of on stack positive our consumption were a XX% basis, we a up think with two-year And why anchored prepared in QX

over out, those nuances between shipments sometimes the there but consumption are think quarters. long-term will balance I and

it. Got

similar you saw know international up that, I growth from out but it just [Indiscernible], out is on relative quarter? you And to following anything in an last the standpoint, what to point so called

growth International still see we for to continue those and in those QX, remained customers. and Yes. strong growth markets with

the one barks in you for announced? again. for Do expect contemplated the any that at the just me In of guidance the more forward sales record, pricing next that dog you quarter? Is pull

forward that customers. see anything buyer like like We don't or our like that, typically from a anything

don't anything that. like see expect we really to no, So

Thanks Great. lot. a

Yes.

Please is question from Korinne Wolfmeyer ahead. Piper Sandler. go next with The

thanks Hi, for the question, on quarter. the taking and congrats

to So I you pipeline have wanted little and dig on on what spring. a bit beyond R&D with going investments

And spending how thinking about the bulk should focusing forward? be of you'll product think you do that new the cadence forward? be of going where which Just the going brands, products? introductions Like which we then,

Yeah. Hi, Korinne.

company. of strength to quality Our pretty innovation is innovate extraordinary broadly. that beyond we is key strengths the our of have innovation And for part able prices of Steve's the being

lot across The innovate big seasons, typically of I which resets we mentioned, I skincare, keyssoulcare.com, when gives our Keys us and throughout the WXLL see, cadence happen, make products spring As the year. spring our in elfcosmetics.com, our and really continuous core of for all Soulcare. the the data fall. it's of between would PEOPLE time segments And but decisions that launching big assortment the the resets from season a each to core turn wXllpeople.com. that and we're spring innovation you new say on

Gives WXLL would I all of at couple and first take across a launched for I only we spring. four into other our skincare. the lot brands, the entry PEOPLE, on brands, really our me a not a of the confidence they mentioned of our quite stronger. look in never is robust. program innovation say innovation are But I just been pipeline So our

in that. in innovation do body job be standpoint. Soulcare products; continues categories we category. Keys launched an five this out With come We products behind additional plant the the other There'll have year. a later that innovation powered see to first phenomenal more you'll

innovation we And do over so skincare, that ability say as we only particularly not of last we've to breadth an X the I'd the years the I really on area in go forward. have but our really and strengthened it's capabilities the focused innovation have years, feel in

to others? good one of is back quick of seem in Thank come that have That’s rebound or it. one, back terms you or more Got products products sooner the than you. helpful. really just have And then there with specific bouncing color any cosmetics, surprised

their I segments. masks of moment color. as core business, would across say our would it's Lip seeing for along people a my express strength now But each could we're knew took off our and We right expectations. Lip more have

talked seeing take when I earlier so of relative pre And trajectory trends the across of that beyond is category. what at I to And the we're look Certainly, -pandemic. What we're about the -- we're a well-positioned. pretty just good things I think I category seeing? slope

sure with And particularly to some Eye, lift the think, an Face see like Camo trends good Power prestige category, $X can we're glossy phenomenal value even contouring Grip see and in $XX. out to we the at jump strengthened also us business off Brow our foundation. there. starting innovation there. see what start. any you'll sustains, I on things We're again, that at on And a equivalent versus our good -- of doing we to number we pallets contouring, latest from have things continue our is a make Lift have emerging Eye on on that in lift, I very incredible our We

about close the we So feel But we'll overall, to great the stay trends. portfolio I have. of items

Thank you.

with ahead. Parikh Rupesh Oppenheimer. from is question Please next go The

Good afternoon questions. taking and thanks for my

two on the questions pricing I front. have So

gross So the terms others margin initiatives other secondly, similar guys just last to the pricing? goal having of, prices, I front other Or to to help the the drive it did is then and category, also where in on you helped it margin mass pricing can up gross to take first, gross the be in have guess maintain took on margin improvement? And raising to very you rate expansions, and philosophy and you starting ended seen could time expansion? strong drive margin then initiatives

Yeah.

XXXX, So Rupesh, we happened pricing. what similar led in to

that take I'll see to we don't the really our discussions the our don't their who that pricing. question, will I specifics others over we nor marketplace, way first, people we were one But not potentially the pricing. on dependent of on I I retailer have Mandy. at of not in on to and last. taking number a the XXXX. turn taking value is it more pricing least side. be on believe so, second no but us heard think And We've relative followed analysis pricing, having the even really if in And in people is discussions we It do many that else took is then

point. gross And margin on the

we usually remarks, prepared actually will to So, it's as something, event. When and back talked we I a take XXXX. in our macro to it take pricing, in reaction

decided to feeling. XXXX XXXX In to to was in we May when that pricing, in some in response was take headwinds FX that we take response decided the pricing, were to tariffs. it of we So when

we're And time with inflation So that freight around, it be longer. while overall, driven cost a this costs that will those we been by seeing. us for has elevated little anticipate

pricing. taking driver that was the behind so And us

really an to we're builds costs that gross seeing. guidance. to more have color back that some we'll help May is margin. come with offset when on overall of those I our So fiscal goal 'XX in we our that How think Again,

Okay. Great. you. Thank

Thanks, Rupesh.

This back closing concludes turn any our question-and-answer for remarks. over to Tarang the conference session. I would like to Amin

seeing of Well, meetings and outstanding investor at May, and team be Beauty, outlook. when have today. talk so thank XXXX delivering we'll again, some of incredible e.l.f. again, in us well. the fourth-quarter We I'm in results. everyone, you Thanks results fiscal upcoming forward with we at for some speaking you you, everyone, the our look for to to I joining -- grateful

has now attending today's for you Thank The presentation. conference concluded.

disconnect. now may You