e.l.f. Beauty (ELF) 3 Nov 222023 Q2 Earnings call transcript

Thank you for joining us today to discuss e.l.f. Beauty’s -- presentation today includes information presented on a non-GAAP basis.

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

Thank you, KC, and good afternoon everyone. the for our fiscal discuss our results will outlook raised 'XX. we drivers QX of and Today, We delivered another quarter well-ahead of our expectations. sales and in We XXX net by gross increased grew margin basis points EBITDA, delivered adjusted million $XX up XX%. XX%, by of consecutive our growth. sales quarter marked net QX XXth

e.l.f. the category. a Given momentum, levels. In in stronger, above trends X% versus by QX, ago even our seeing and across pre-pandemic guidance. We're full category consumption our we're year the year up were channels. raising tracked encouraged we're was growth cosmetics color cosmetics grew XX%

points Our for Revlon market share were five grew by time. margin. first a the XXX the position basis four by growing top overtaking brand number We fastest for the wide

strong, e.l.f. channels, year up XX% Looking skincare, growth at versus Skin in tracked was also ago. up well-above XX% category rates. QX category were consumption a trends

I inclusivity into is people, ever highlights. launched September, our we growth diving the and planet communities The disrupt highlight how Before the a to creating to drivers, QX industry are few designed impact beauty report share shape building on In kind a positive report friends. of norms, culture and we different how first company positivity, a our want to showcases through by our impact and making company furry accessibility. brands connect

site the groups. shopping the major for e.l.f. one became retailers. e.l.f. workplaces. remained who a Our our loved points e.l.f. grew annual commitment a the top to brand Sandler across favorite our a brand the all for among share by income XXX semi-annual basis was We elfcosmetics.com versus Beauty among cosmetics In to Piper the rank year most named its Survey, recently teens culture time, stable Newsweek and people attained ago and Gen-Z of one Teen XXX top only number spotlighted number first XX favorite. list is destination teens. by

consumers engage results teens attract engine ability with entire innovation and proposition, are value and driving across to and Our business. our strong

each a QX. of take me how in enabled talk drivers through these Let our few results minutes to

First, Holy every community We and and in eye, proposition. believe value the we take our prices. looking prestige trade absolute for of high-quality from from the best the accessible value Prestige to face to Grail comparison Holy beauty prestige. everyday skin mass products consumers choose products deliver for are known price see strategy we're our to versus $X our prestige price value best concern. evidence a inspiration higher-priced for benefiting little within We extraordinary both strong focuses and of gains. compared We and We and share as e.l.f. provide evidenced at our lip, trade by value, relative down consumers point point mass Unlike Grails $X as on make over they broad-based many our and promotions. over average these cosmetics and of brands. the as for around is $XX pricing brands today legacy brands, for of instead The in

we're our is powerhouse. an of driver second that innovation The performance in

across time over multiple has Our innovation segments. leadership engine

over largest setting cosmetic seven collectively sponges, primers, Our sales. eyeshadows, brushes, make half segments, browse, concealers, sprays, of

have saw and each two segments in all in number or gains QX. in We the position share seven one

consecutive Best this coveted Alora has honor. Our Beauty of of receive year the garnered industry innovation Beauty recognition. continues In three marking won our e.l.f. awards, to highly products Awards, Best XXth of the

launched $XX be number glow Its propelled Halo prestige our a helped incredible to $XX selling our $XX, in community. to the QX. with products our Our jaw-dropping a value times, partners. with significant shades are was QX. online Power Glow on prestige sold category the our one sign-ups viral seeing of upon filter. are also in most has top-selling value $XX, equivalent We're success SKU for are members, our at [Video primer Power enrollment Beauty retail versus drive X.X elfcosmetics.com primer new and Squad Group at and the Beauty equivalent Halo in recently popular versus access get its this with in early at year-over-year. builds multiple eager Presentation] both resonating growing liquid million now Grid Squad strength to Our sensation. out viral as program loyalty with consumers increase over product to XX% our

stronger almost and source has Our rich sales loyalty XX% values. our average more members higher drive our of Purchase on have order of retention elfcosmetics.com frequently rates, data. first-party

in talk plays our me that the business. about to role a Let step innovation take back

the As say, strategy. our linchpin entire of is it I often

each Power to mineral-infused basis $X, pace share quickly an Priced have XXXX; our X We top and example. leadership over a Fighting year. Face out our the driving the other. the great success remained in product We Poreless families primers, our launched XX franchises of it years a built Primers In Primer, growing of few XXXX at the past Putty Importantly, brand grail X,XXX Grid we iconic later share in Acne primer XX Primer That are prestige QX, followed Primers XXXX, and primary family points building to holy SKUs that innovation through Primer with after XX%. one year. and Luminous and in initial Putty a all upon holds a Putty leadership our primer in track launch record compared this are Matte then, XXXX. number across growing Poreless of as of original e.l.f. We top at the Primer primer our in building $XX. SKUs year primers.

Holy behind new return that predecessor Grails items to to our launches. newest continue also and the successful attention find We innovate

and families items result, balanced between our each our existing growth we're enjoying a both new As share. primary with of growing

focus good primers. built addition franchises sustaining A franchise is extend share our In categories. to key our innovation beyond success we innovation in the to building equity efforts segments, to across in example create we've Putty

in leverage this we our to excited as QX. and approach in existing to Blush segments share conquest new build Bronzers areas. innovation Putty and the products in Putty and seek Our I'm best categories bronzer selling were blush

consumers is performance attract to with ability and marketing. engage The of our digital-first third our disruptive driver

strength In Z. August, engage augmented power We across multiple empowering became and to our to new grip and first among at Hashtag billionaire sharing TikTok of frontiers. a for built lens Twitch, branded pushed creators. now latest garnering major reality beauty first Gen a on recently penetrate LU with XX on were billion women B major four-time new in with continue are pioneer our a over a have We company the launching challenge, TikTok beauty gamers social and one a photo the content platforms channel creatively popularity rising newest Holy and Grails. on that's launch Snapchat, awareness We to further were aimed rising reality-based brand Real views. we consumers platform into our build We

platforms to community on find continue our engage meaningful. with We they most

years, the past XX%. increased to Over net marketing our investment three we've from of X% sales

benchmarks. marketing driving multiples is industry above Our working, intent ROI

Our helping audiences, in new platforms penetrate us new reach test are marketing new frontiers. initiatives and and learn

These value helping our high gain performance. expect be to us we engine range With topline XX% now attract and space. of proposition, innovation and more the end ROI, ability our retail ongoing consumers fiscal the our strong momentum, XX% three our marketing XXXX. at for to are to the combination of and drivers of engage

with of we've earned retail expansion space in several a announce of to subset pleased our are partners. We doors

for major be XXXX. we space, will to spring spring Drug space Canada we're and white Internationally, XXXX. and expanding gains in Walmart represents in We with addition in XXXX, announced with which the Target spring CBS both in space space Shoppers XXXX expanding with previously fall Mart

In in for we the gains, the addition previously announced with space to fall Superdrug U.K. XXXX.

to our with which set built overall our brand a accessible points. competitive the outlook, and raised details e.l.f. at Since delivered want to and Mandy to premium foundation for results superpowers, upon price superpowers our e.l.f. these take We've advantage. commitment Before cruelty-free inception, Clean. I quality has discuss moment our

With according recent standards most Certified a beauty price broad products sustainable safe first rigorous quality Fair on and manufacturing that the working Trade promote is it protect Certified. was made facility factory third-party conditions signifies supply Fair to and with Our the cruelty-free, Certified. Fair premium for addition appeal consumers that clean are accessible have beauty Trade product require chains. e.l.f., transparent A vegan, to that and company at a points Trade that employees, environment seal we're livelihoods have can

win While to Mandy. combination unique in brands beyond. one replicate to can any XXXX of fiscal our to call turn our competitive the other forms the beauty we and try now fuels over I'll of ability our believe superpowers moat and expanding these,

you, Thank Tarang.

digital broad-based results driven Our strength outstanding. second year-over-year, net as commerce. XX% quarter retailers across sales as grew QX by national and international were well

units and be Our balanced, consumption as continue as in products and strength our innovation. to in AUR core both well well increases between between recent both trends

led a inventory top We a for year. XX% gross year-over-year. digital strategy in of of in a non-marketing well. basis, impact and XX% XX% investment margin margin significant transportation basis drove compared and benefits line in savings versus percentage to than Marketing the line over higher our In serve to expected a leverage of our Digital result QX, year outperformance. quarter continues saw as and lower our net to as of up prior consumption XXX increases, up digital of We points basis These SG&A ago. price compared on approximately a compared our year the was cost in XX% mix. adjusted sales to sales, gross ago channels an On quarter. and top as us Gross line QX, given XX% trends. better-than-expected total than trends more adjustments from of and XX%, the was XX% year. offset margin digitally was approximately percentage expenses costs Our were margin was last consumption accretive drove benefits

momentum we expect sales. sales. $XX with versus investment full was ROI, diluted last or diluted $X.XX of $X.XX At of year net $XX combination adjusted year. per approximately be adjusted a per the EBITDA margin XX% million And net digital EBITDA million, million line of to compared range. income for XX% or XX% and our As was XX% to top share Tarang and approximately strong QX our ago. to marketing end up the was mentioned, the $XX net year Adjusted high XX% of now share,

strong, $XX balance remains cash well flow, us in million to to sheet growth and the on quarter cash execute a balance we Moving our a balance cash ago. sheet to hand positions this, ended $XX plans. believe compared We our of the million long-term and with year

million ending confident of free strong the balance we're cash in inventory June, expected. our in from seeing. year-to-date seen consumer $XX to pleased generation strong as flow meet ability was with $XX million, Our demand the up We also $XX remain million. I'm approximately we've

with less on a one quarter the Given our ended than times cash basis. position, we net debt leverage

We portion are rate our expect exploring year strong priorities remain supporting cash the investing to environment, strategic extensions. on In of also rising flow. retiring for a we our behind and initiatives growth debt cash our given our interest this

turn XXXX. to let's for Now raised fiscal our outlook

XX% now approximately year, XX% For versus from of net the to growth full we XX% previously. and expect to year, sales XX% prior up

expect $XX.X between up million to million to $XX EBITDA from million, We adjusted $XX.X million $XX previously.

to $X.XX between million, million of per $XX.X from $XX $X.XX previously. to EPS diluted We $X.XX previously. $XX to expect up adjusted share, million net to from million $X.XX And income adjusted up $XX.X

to to compared to tax XX% our adjusted as to be fiscal XXXX previously. rate XX% expect approximately XX% XX% We

at a fully we diluted year-end. approximately Lastly, million shares count expect of XX share

on Let me fiscal with assumptions our additional Starting color XXXX. top planning provide line. the you with for

outlook QX our Target relative as and Shoppers incremental ongoing spoke in to reflects our Tarang expectations, as our Drug momentum. the with about related pipeline Mart well outperformance gains to Walmart, business raised Our space

largely of We margin. XXX costs. compared be and points XXX This gross now our in outlook is up as points. to gross our expectation result to to basis for QX outperformance Turning margin year-over-year an approximately improved previous our transportation expect basis on up a

support the and terms key margin of the price our increases, mix improvement. savings cost for In accretive to we expect of year, gross drivers margin the combination

adjusted to turning Now EBITDA.

prior to and XX% our to versus the and growth strong XX% Our in be what quite previously dynamic top a embeds approximately non-marketing potential, XX% margin marketing to our our of fiscal expectations with adjusted at cosmetics XX% digital our basis remain whitespace spend profitability margin strong of and raise remains our is in our growth. increased skin approximately of be combination year-over-year. that EBITDA now and leverage XX supported adjusted internationally to environment. leverage sales EBITDA and continues a implies outlook approximately and and we our on XX% implies position expected investment, outstanding up points In summary, from The end both of we're our significant Even our growth outlook XXXX. improved year, expansion outlook sales growth, pleased the the This expenses. of range. to growth XX% XX% by pleased domestically QX SG&A outlook both gross line are and to care, on to across with meaningfully in results long-term top upbeat support Overall, top

to EBITDA continue to our adjusted margin. also expect We leverage deliver in

open our solid that, cash flow believe overall growth. continue sheet leverage returns to to call operator, balance we low the questions. drive and and strong you our generation shareholder Finally, may can With support

will Olivia Please Raymond [Operator Tong from with session. ahead. question begin now comes We Instructions] question-and-answer the first Today's James. go

Great. Good Thank you. morning.

if guide flow-through of the have a is But curious, would bit little you of the I that, profitability. bit quarter, you. you strong talk you you obviously about And fantastic? a hearing be on very in about beat, terms by if about just out and a marketing. less kind that sales what the how talk little that Thank consumer assume the but could in just raised inventory some lot could we're a of slowdown, were here. Clearly, of quarter. obviously, and congratulations First,

Sure.

So, hi, Olivia.

As net adjusted you XX%. QX really pleased up results, we're mentioned, up with our sales EBITDA, XX%,

pleased So line the our guidance to on top results. environment. both line Also bottom with and really in strong raise this ability

guidance XX% net for standpoint, half And a from which implies second so our the continued of strength. is sales

to provided. great the then QX, deliver And about and also we so we that ability outlook feel our in

down, slowing inventory terms is think slowing question, and that In hearing you Olivia? at you're that down. retailers, Is I are that inventory -- indicating of

Yes, want exactly bit given just beauty backdrop, how how they they're how a curious pulling to less it. so about -- exactly, course, inventory thinking little back but how you're of on hold of the much just

Yes.

we're inventory our position. pleased quite own with So

standpoint in $XX point, In fact, your we up a from have And in beauty, that million million you XX -- saw quarter. here from from June, our retailers. the retailer ending inventory in build to September felt not to our

we the think keeping we're our a of I have that problem up bit just fact, retailers demand of supplying sure In that and little the seeing. making we're opposite with

in to been have stock XX%. do We remain able to

So, very pleased with our position.

can mass seeing a little potentially is detail that innovation new Or players? gaining of we're from then trade it the any are incremental your in more makeup passive, in of whether a down it And of Great. function bit share give or in? you're you of terms terms consumers And the you detail you environment that think the who that from? look? you're any Is other

Olivia, is Hi, this Tarang.

take say across look the engage strength, internationally. channels, are points, engine business. would if retailers, national we our proposition, I and our value So digital ability all All innovation business main price we're seeing a that three And and our attract our drivers at to strength consumers.

down we're two the different on we're seeing price for seeing items, think higher trade point I down, things our Prestige. of from some One, As trade here.

Glow So equivalent. the still is phenomenal a to items $XX like filter liquid Prestige our value $XX relative Halo

where seeing seeing picked engage we us grails our really value comparison I from well brands. to And up consumers. is consumers and And to great and we're that basis across that innovation up think within our XXX mass share coming strong are then ability consumers So trade as seeing holds of that the we're points making as other again, equation there. growth we're also holy

pretty different seeing variety a it we're So broad-based and across players. of strength

Great. Thank of Best you. luck.

question Teixeira ahead. JPMorgan. Please Andrea comes The next go with from

strong results. underperformance, also from to in Hi. everyone want and and Good congratulations you, any I sales. especially, take to afternoon, thank don't the credit

you you be consumer just talk mentioned in think, post to seems of even about the I follow-up current kind in the you pricing, that the sign premiumize, any and made, of not of of within I eager backdrop. you that dismissive price have within think still terms skin terms Tarang, you move that of premiumization it have don't behavior? I trade within portfolio? Can I care only on will are it I sales that And on now products? ask in So down more a families comparable consumers can products, seen but guess then your if but front. that And pricing, average comment

Sure, Andrea.

step side back bullish long on the mass the been category. skin care. I'll color on -- and with maybe we've much this and cosmetics category So start the very we strength We're mass that And quarter. saw

XX%. well category, While positioned. the the category we're the And grew the for then X% it was four up even weeks, in better within quarter last

Our consumption, tracked skincare was I in up think, is e.l.f. XX%, category XX%. up XX%. side, grew the on skin channels Similarly,

really seeing So the board. that is across the we're strength

Prestige, from down getting trade brands. we're mass from trade getting other but are We within also

retails to Our color brands the are legacy mass Prestige unit are relative on $X $X side $XX. that and average are that brands

across holds we And value any consumer care. any in range. a true our price point skin for really proposition So superior have same almost the in

our at skin. I quality within think skin helping to these ability accessible bring price also win points us is care Prestige

we great of amongst So consumer And then long terms that. Gen we've profile, had about in strength feel Z.

you our brand really of strengthened both more picking been the the speaks our teens, Gen we it from amongst activities across teens number think teens, engaging X both and groups. innovation in to call, As attracting consumers. our I combination consumers heard against millennials position also and all But as and up beyond one well we've as income the

great So fundamentals business the it. we're about core fundamental the health feeling and the behind of really

within be thinking for how benefiting, your of doors? of in say new a fiscal distribution of that of XX%, it one-third additional and That's this or there's new XX% to lot moving should call Is into the super I growth to fair you're helpful. breakdown pieces space premiumization, terms And distribution. then shelf on like doors know still we specific the of new

Mandy. it's Andrea, Hi,

growth momentum year-to-date So into From the largely by we've the momentum a continued we pipeline with the go to a perspective that be picking to up driven for to in talk that seeing shoppers. been we're Walmart in and a as XX% and our about second the outlook that from half. baked strong Those have well. we XX% well did just distribution we're as had Target outlook standpoint, as space gains as in that

the so we guidance way how we about that's our built really that And sales think provided. up to

Okay. on. Thank it you. pass I'll

Ashley question next Please comes from The with go Helgans Jefferies. ahead.

quarter. taking on Thanks questions our for Hey. the congrats and

continue the this of sets? just we Glow is supply a Thanks. on product? you your the And mentioned then to wondering, of products. plans gift to constraints? to stock purely viral function of some your also and you need Halo As call outs have We're Or the see nature curious on about holiday, had

Okay. Hi, Ashley.

So ability great saw I'll consumer to And little over in-stocks consumption we've our customer really XX%. on demand of stock first up you and the were outs, the a had. our about for all, back feel bit meet yet quarter

regardless about And $XX great phenomenal and sensation. feel that demand. specific of to was to we're a priced prestige the It's item, terms item, there, that that Glow to product that's viral disruption Halo our filter liquid continue we meet a compares So in out a the $XX. ability of only

this forecasted. brought selling it just that stock demand keeps was item a we of, We've initially matter it back So what XXx out. I in on think, the was probably and

item for as of off good Power I standpoint. from because have kind fourth these and as into -- of primer. But think chain issues kind more feel we that well down. But to taste supply really that are should plans items have to in and bring our bodes strength situation a time continues Halo Glow. to we does real We hard future to Grip quarter will, the we our get improve that from take don't have just time, see I So any this

we're these The these each kind as long franchises, other will core building part thing of back is say innovations, of see any to attention the business. of our sustaining I particularly brings

of of then the on for as saw to seeing our prioritize items strategy time items, they're items, big we're years imbalance. and the really kit strength We worked during with and yes well. And the first were, business. we've had so And really strong shift at recall last holiday these forgo lot that saw if that we And year, sales made to in really box really, you put core our whether exceptionally And the our think, brand holiday strategic expansion companies a core we the certainly insight puts on one that or a your And so consumers. in margins. core new terrific impending e.l.f. it really gross a is a container holiday, but is box. resonating of some a of gift, it not kits, the only I in holiday consumer we period

last on retailers. And strategy few on holiday to that so is we're that Primary There year of kits will items. consumers love. following everyday really what some be core really elfcosmetics.com well. as forward on our is focus our the focus we year with But these this limited and similar a did items

Wonderful. Thank quarter. you so much and congrats again on the

Thanks.

question next ahead. from Chappell with comes Please Truist go The Securities. Bill

Thanks. Good afternoon.

afternoon. Good

bigger end a And -- on is the that the little you're the new kind is guess is guidance, sure so a to just see be additional decision color to want end support? timely. was as of in I high had more Was that slate great. schedule kind ahead the Just a would around new just running a of and you that that this just Thanks. do understand, first this higher and marketing reinvest, new of products I and of of you there make kind norm? of to

Sure.

the invest our to top XX% do with go we're range, really So XX% on that investment. decision to seeing to of range marketing has returns our just or end in more the marketing the to

invested. dollar above in ROIs sales any benchmark Our are of gross well per terms industry

what new in terms momentum of our as both doing in consumers seeing attracting propelling well as You're growth. terms it's the of sales

kind going really of there. is what So realizing we're it seeing and

also about our and thing invest great able -- I leverage. also is having in feel other really we're EBITDA we're to term, brands for The long the

is EBITDA a our position be think, terrific in. I able margins basis XX to points, being to So grow

invest love being that to business our our combo of in profitability. increase more able and we So

expect the momentum? Is just you you be that something it future? is to -- at the high end foreseeable that And for see that

we investment Well, of we this until guidance the what where in. certainly to tell see I'd year, to going brands it. about, and think continued margin XXXX we wait see definitely May to so delivering when our strong we the be give in But you be is have ranges and We'll EBITDA this our do behind terms objective I is to glad that talked able our for year. I'm

great. the remainder Is could And that's in No, for Mandy, the go that tailwinds Or you're locked some of of real costs? you quick, even kind just this rates. seeing terms year? on fairly freight year-over-year that in they bucket of biggest And are further?

Yes.

the rates freight costs we're So container the are seeing. that on inbound

So that And that we do of year, bit and you last now. to watch, few see good right months, fiscal but stabilization know I high, to here -- little some a have think exceptionally in which seen were feeling I for know is into that and be tailwind great will 'XX. we about last rates the continue a something us

Fantastic. Thanks much. so

with Davidson. go Next question ahead. Linda Bolton-Weiser Please from comes D.A.

Hi. Yes.

that was about the the just with fiscal cadence guidance with type quarter gross year? gross it's of margin. the in seasonality any this or So usually exists sequentially you I again down out margin? to trying here math fourth I think have Do of the comments work

it's Linda, Mandy. Hi, Yes.

had if from we higher QX would half, in -- margin, And program. I second So gross step year, when down implied QX. do holiday at the you recall, we last gross we that the say see because do it we walked for a we away look into usually the margin

So assume I think to think your as about that's model. a fine you seasonality

to you growing is prestige, faster skincare. growing just in I on theories whereas skincare as And color Mass, insight color category Do the you had curious, faster any have if than at was that? Okay. all then any why than is

I are have other Mass So, now particularly that insight to skincare. much think than we attuned Linda, think and consumers don't value right I

my what I at tell you actually few That I'd strong much skincare years. be quite has would great think now better offers products is a for But been value. hypothesis. a really

Z their trend continue amongst We we of skincare interest Gen their in with consumers our color. terms skincare needs. see that so And about to caring it in even see audience and

bullish we're Mass both categories on the So side. on

Okay. very Thank much. you

of go comes question Lizzul Bank Anna from America. ahead. Next with Please

thank and you the how you of afternoon if as your e.l.f. good demographics. the performing Hi, for and brand comment among can I it's skin a wondering question. on expansion was standalone

to you category? to Cosmetics, think e.l.f. you into were skin the brand the buying already seeing growth do or on going skin skincare a by consumers through entrants is Cosmetics shelf new Just next are e.l.f. as that driven the into e.l.f. moving e.l.f. who mostly or Thanks.

Hi.

really we're So pleased progress with our on skin. e.l.f.

you we brand. a pull it did As standalone it as apart mentioned,

own I quarter think building a time couple its put awareness of the quarters campaign. ago first last or was we

We innovation have a terrific pipeline of on of skin.

we see you all outsized think I and skin. e.l.f. can So us in that in of the those have things for growth working are definitely

more would where longer-term, shelved the health lot we a right consumers, it where of current core is is, have particularly now, say, base terms places like In it Target, user I primarily of within We they it of highly e.l.f. set. do skin, an of open skin. understand problem really know the e.l.f. main consumers e.l.f. to was and we any awareness e.l.f. that e.l.f. are

our right now. skincare So sales the think term, retailers, the we're set. most some that's But I also longer particularly of brand in testing in

brand, going have a skin. e.l.f. between see to consumers given the our and particularly new nice the you're think that innovation I consumers on balance to we

to this how Thanks. shelf Target, expecting Cosmetics distribution just are and increase e.l.f. and terms at Great. e.l.f. as you skin? the balance And in space between of Walmart follow-up, of in a

I'd a and e.l.f. and as we well, Well, between will be to of on anytime closer that most of of will do our skin of biggest X% more And here. skin still or elfcosmetics.com put X%. sales I the just cosmetics we into there But that an get think the be to of during case color retailer, at get business. will that still space, believe the in. probably opportunity e.l.f. is we given the our majority overall I very and difference of amount the have and assortment take us opportunity against available. has having it more gives kind space think to Amazon. It innovation much skin say that share XX% skincare quarter, we definitely represented to our e.l.f. more I mean with the that's

opportunity space, we sets. into to we'll when get the every get, get skincare So particularly more more we be

Great. Thank so much. you

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

Good afternoon. taking my for Thanks question.

consumption, what So QX digital there in a quarter versus acceleration saw guys just this on was year-over-year. strong you

of terms Just any color what's in digital in that more driving strong penetration. increase

it in our digital is on our thing of there. marketing plans of business engagement foremost, have the Starts nature and the say are first put we efforts point there. But consumption; the other and level much really we I'd digital things I'd rich year-over-year. Rupesh. Hi of two take now to or X.X more members. program program having lifetime of I'd value point one, significantly was loyalty frequently, have source data. million purchase up That higher squad those And XX% is, to beauty a other and most behind there, members first-party

more our that also that mentioned, And you able have makes real actually strength, first-party across digital different we've have targets. our fuels properties. it look-alike everything. seen marketing effective, I being data So to But as

to made great quite but investments growth, and digital good be think I a growth. to us seeing we're Amazon a where business elfcosmetics.com our improve of retailer.com, for they've their only not target.com, continues ulta.com, of So and strong source number

with overall fuel brand foremost digitally it with digital seeing it the let start we're across starts to a our and as first everything way approach So native else. and that

be can the the just significant Okay, it spring? front, and Target how and great. there qualitatively other on significant like seems Walmart, retailers these about between to are going the distribution pretty Is then just anything named. you in talk you additions quantitatively, some of And

Yes. years ago, I the on of space we've track nine If U.S. good XX,XXX years. probably the expansion; a I'd about back say had record space up over linear we had in feet

life We us XXX,XXX it, some look there that incremental in year change. couple retailer's over year-over-year, have step doors that, target feet field our years one really than now. with. other space was massive all a of give more been you where you chain a But were a And linear where us if gave I'd their space pretty subset across doors. call had, it's There early our methodical XX% will of

like we So that cadence.

us going always comp whether to space. drive growth store productivity, is able be on focus primary gives being Our regardless to retailer some strong

statement They and would are partner. national facial care. I also Target say, now longest-standing -- yes, making So cosmetics brand particularly a is two e.l.f. I or think they almost on retail definitely further e.l.f. all are significant, top of across three

is us So growth. with really still opportunity. to approach and feel I -- white model the pretty everywhere a pretty on But across of approach. quite massive productivity even able healthy board, of our build space top a being it say have about we look. this pretty we a that opportunities with space overall rollout have definitely bit give I'd And the consistent but they're space having disciplined goes the Walmart, to hand-in-hand of our a

Great. Thank you.

The next question William comes Please ahead. Blair. go [Indiscernible] with from David

questions, than even on then in sales you're data And that My on and for the EBITDA, implies is This higher your question high-teens of year-to-date compared heavily that? of but [Indiscernible] stepping a reason of low-single-digit would first been implies guidance second front I half about implying end David great nearly year-to-date. and second range asked guys be you high it the that's to sales quarter. to The sales, for and year. the and XX% compares roughly earlier why the is the the in said the has Hi. towards growth half EBITDA second EBITDA as it at scanner XX% half running one the so guidance, the Jon for Congrats weighted on on Anderson.

are imagine that provide color and slowdown top you EBITDA if on on modeling the that implied investments purposes, could I the for the the some the So reason line would on piece. main great? marketing But be

Hi, for David. Thanks the question.

So thing, XX% to standpoint, overall EBITDA is we're we from in growth of. the an in guidance something feel guidance XX% great XX%, XX% adjusted on this topline about really environment that proud quite again, our

when a take balanced of to versus comes we approach first terms it In half, our always half second guidance.

channel so, seeing far data of encouraged the growth get And tracked ahead want right with now, seeing to that we're ourselves. never XX% phenomenal. too We're

continues for rate Given were of our But think a QX, prudent that, QX towards a guidance. that. run it's not I assume net We'll I modeling us year. balance sales more little we if bit for wait XX% to versus do think the that the

this a to we're with point, taking approach see But guidance. so, at it. balanced I'd our And love

On right. and standpoint, the for QX half the QX. XX% bit first year get little marketing investment of a to From of more EBITDA at side a require in to full the things, you're been we've year and the XX% the will for

on being down the in why see up first half. margin versus basis that's the you EBITDA year-over-year a So

you impacts in you follow-up China, COVID helpful. model an very one on hybrid then with again that there's And if That's supply could China? color Considering Great. been utilize in any the provide up shutdown ramping chain question. from

our kind in Tarang. team product. recently, Yes. it's impact, and a we exceptionally we David, produce say would of our the I'm and not of our lockdowns test I major are last Shanghai, shutdowns. two came proud quarter to biggest rolling lot continue and team of months China. team More ship seen any yet for with in operations Hi where have

I supply pretty think the our well distributed there country. is throughout chain

don't so, directly in any have way. our been think of I facilities And impacted any meaningful

And so, meet to we our about great see. the to continue that consumer we demand ability feel strong

very Thank you very That's much. Great. helpful. all

Korinne from comes Wolfmeyer Piper of Please question Sandler. ahead. next go The

the Hi, question good quarter. great congrats on and taking afternoon thanks and a for

of lot had expectations think like the channel? and first, the you're you So a a the to how to little recently. the that's baking you DTC Can really e-commerce. what is you momentum good more speak what down bit just within in I'd momentum terms going far the to just in the strength continue? do Obviously, like into of kind road DTC ask on are And seeing channel of

our We're e-commerce pleased Korinne. Hi quite with performance.

dot-com what as it's not we're saw to get that We Glow mentioned, as from and elfcosmetics.com. consumers over of broad-based, also bit Tarang our retailer.com well As only launch. say we Amazon. little a a well, pretty Halo but owned would really I bump the did this quarter on seeing

have still a we going fact, on that so can In Halo in waiting stock that's their to list back when they hands for Glow. be consumers get anticipating

So the outlook. continued of not at in tune growth I but would the we growth e-commerce XX%, solid channel, outlook for that our in the say see still bakes

you helpful. very And you. to is what all Thank bit just to then, bit spending of of extra being some going just on digital, marketing continue going social like talk That's this it a expanding about online, efforts. to a Can little beyond more your entail? groups? talk marketing? upper the some you. efforts to the just marketing with generations Z, you media spend? older you kind of maybe -- talk through this of income going Can of, -- maybe Are to to do Thank some Gen target your extra Is

major brands it's well. few the core on brand, on views. really our I terms it say a I continuation new beauty great we our We're major the beauty results on last brand latest is efforts; on first Sure. TikTok. billion deployed by on response of of against BeReal. would successfully we're initial And combination see think there beauty challenge, returns XX that over And We the we our brand advertising in digital first with of the seeing Twitch. on strategy marketing Hi, one prospecting were a years. our as four-time the encouraged We're and Korinne. building We're now, the on Twitch, we're elfYou frontiers. I beauty over really and billionaire of awareness TikTok up think, having first a good

greater as can to prospect continue brands. platforms marketing new our spend both we awareness new as efforts go collaborations. behind additional there, to There's a be the able and well lot So be to our will build further

see store, and have driving. feel ROIs And great I about you'll they’re the what at the has it’s particularly really to in wait what doing, I and our but when look so, team momentum

you. Thank

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

everyone. that last guess, to and start follow-up question. Yes. good just afternoon, on Thanks, to I

terms the e.l.f. directional et where about can spend, In incremental Soulcare, business legacy by give it's of category, Keys some going care, color marketing maybe you cetera? Skin

Sure.

So PEOPLE against to WXLL the But in trial That say, the will down without Soulcare. the dollars, terms it awareness Skin of opportunity. us success and I breaking would go line But in vast nature is say, look, our out build and both color. would Keys the the on in our with size total of the double we're and business. continue majority business also biggest and gives probably the part business, seeing falls our of to in of e.l.f. opportunity by just I that it app, e.l.f. the

the and Skin PEOPLE. would So amount WXLL I’d and say on then be Keys primarily e.l.f. remaining color followed by e.l.f. Soulcare

And business, in the color up is can move within kind more offering, through of then brand terms and kind kind of PEOPLE you consumers WXLL Thank kind following the in Do And offering. it. I but anything Keys of I there about a to think the or to of then move the walk horizontally enters new lower-priced health, business even into trading of a any to over way of guess, questions, earlier there, into the But on of into interested going them presumably first into they of help skincare. you moving I'm one you. kind skincare? forward. sort how of part stop the Got trying of moves makeup, think somebody from up to that color recruitment higher us priced

Sure.

try would of few move lower extraordinary acquisition price They'd and I I have the delighted of I by this range. our say, historically, So be priced ago, a performance new different products years the today, across absolutely would would up user product and the have of we're then products. points. I that seeing question way answered said value one our primary usually in one somebody -- would is

latest think launch. the I three And with community first create our similar our talked prestige grails introduce consumer just actually, But or which perhaps can wants tremendous we we're when item it in in and picking we're up the and inspired a new user now. elfcosmetics.com seeing lower-priced one great our a number ago this of is acquisition. many at color an entry item a right certainly, holy makeup, moment looked saw in. brought through at number strategy those many value. all we consumers We an some as our terms of experimenting who So on a more results our with and items in to how cosmetics. Manny younger it, it's Grid in by trying try Power come incredible who consumers product point, at our Primer, of I entry Halo

last very that we are interested try we getting they behind only or point, care, they skin and wanted year Hydration who similar. users I'd biggest And some primary new back was the existing bus with care the quality So, phenomenal them. our consumer franchise then is e.l.f. we of skin which use Again, an the have. have items if is that prices I that see say seeing regardless look the consumers of skin Holy e.l.f. already we're love e.l.f. that built to a but recognize way who our price consumers franchise, that basket all care care. skin product in because their then got not at other

years number they robust rest more our of the So, even I particularly today the Grail to attention of on a model bring think much Holy ago, with products and a our is emphasis than line. this

you. Thank Great.

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

Great quarter. Mandy. and Tarang Hi

platform. that WebX? as of acquisition Thank could your ahead are and terms it continue that in -- how value secondly, research what's you as trends? on price happening being novel ahead We you could interesting and terms to of in consumer well Tarang, just you. an speak highlights how And had there, for loyalty about You've appetite and and nicely then the to to really care? any exciting increases real you're dynamics also material thoughts plans and thinking the skin customer you be offered be in innovate What exceptional Or program? your Metaverse and our mix

Sure

Oliver.

on I'll pricing. question So, the and first go take ahead

pretty And on so about that. seen to well March we said you And we in portfolio. two-thirds consumers pricing our if recall, of respond have

and sales see. very to about on price great horizon. do recently, more an think our is growth you balanced which the growth, have between If increase additional We pricing unit not

sure really we that take in our only factors we're taken broad when have maintaining because are we and judicious for to to very consumers. make do response We macro proposition want it pricing value that

where that's sit pricing right so And we now. on

about say think that the I'd platforms to various we're of starting we're experiment And Metaverse there. question already your try. terms And your going second WebX, I on the in excited on question, Oliver, to BeReal and then other

a of look take our virtual core Twitch, kind it combine on you this physical at channel If experience with reality. does

in We the given of at. even have efforts that our just team is look going leadership our we that, over terms platforms deeper doing in digital and various

The it. exciting our digital there. we our and we But plans come on to say we're definitely focus advertising, I exploring strong the platforms eyes primary I more success think on seeing up. So, in have it, we're right really would which that now is is have some having results. and coming

Okay. happy and of pleased Unicorn And Are some the did so with assortment? Tarang, journey? placement the you with. evolve? But are evolving or you architecture, change the keep that on mean, Project product really where in-stock love you're nature your levels Unicorn. in I Would the thoughts. on with you it like seems I mean

We're Oliver. sure, really pleased with Unicorn. Yes, Project

better to Project shelf, greater get chapter the different number through last presentation In fact, -- we on since a designed next year, went of productivity. of we phases, really Unicorn

I X have. we really can being the packaging. think the beauty over that Last I'm Project because pounds particularly Certified, Green sustainable. that. Unicorn with of even of pleased million we superpowers ties in saved that Fair We're both rebranded we all brand we year, feel first we more Unicorn terms go being waste that of elimination, proud into Trade got of to further,

have further time continual reset. see improvement Green And Unicorn. a on Project think we you'll to I see So you every There's go shelves it in progress. much

sets what our have it's to a and do. out advancement come we're to and saw spring of going recently of we're in year, the of Just shelf I further able terms next think overall what

on been what And skin care? the was as of you pleased the question, in It but with what saw opportunity? that recharge that rationale Last packaging. the for better, have you terms that looks

Yes.

packaging. really this aspect been declare looked that is skin it of we're e.l.f. I We have e.l.f. what that including across skin And the when business was we said, skin clear with care, every its -- we've doing really was brand, own brand. pleased and we at that think absolutely the

I primary of kind Skin think purpose e.l.f. on But so skin redesign And on the task trended education. is foremost. realization communication that on tends to second move Color care more is than first more make tends sure the package the cosmetics much color skin different and the to cosmetic. really of to move impulse. was scream also of care

the XX, better I'd if making I it. packaging in with it's their are skin or the a sure efforts. And along ingredients look of so at core products great channel our communicating say consumers a really you even feel benefits? track the what does were results new terms care we're in of of think job with versus with take And our other up XX% the I working that category

Thank you best regards.

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

be for thank February you delivering forward our for of in look our today. well. results. our Well, incredible discuss and you you, another and at joining at quarter so third We we'll speaking when of to some team with Beauty proud I'm results. us meetings you investor Thank quarter upcoming e.l.f. seeing

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

You may now disconnect.