e.l.f. Beauty (ELF) 1 Aug 232024 Q1 Earnings call transcript

Thank you for joining us today to discuss e.l.f. Beauty’s First Quarter Fiscal 2024 Results. I’m KC Katten, Vice President of Corporate Development and Investor Relations. With me today 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. that remarks release forward-looking the these and you find our to please SEC, forward-looking of results will earnings actual our reports factors statements. many today materially statements, contain refer where to Since differ cause from could filed with

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

Our earnings the the directly GAAP comparable of most the between release differences contains measure. reconciliations and non-GAAP presentation

over webcast With that, Tarang. turn let to the me

of by drivers QX Thank XXXX. we e.l.f. and will our you, outlook results Beauty good Today, raised the KC, and everyone. I afternoon, discuss want recognizing team. our for fiscal to start the

to an off year, of this fiscal expectations. delivering QX We’re strong well ahead incredibly results start

select consecutive companies. of putting our group sales XXth consistent, marked QX high-growth quarter consumer in net growth, of a e.l.f. Beauty

one quarter. XX%, sales up XX and straight total delivered public out consumer XXX%. We only points adjusted basis XX% QX, quarters per $XX net margin In five we for million and companies EBITDA, by sales that in grown are increased of of gross growth by has XXX least averaged at XXX grew

quarter, spoke Last areas in color the with cosmetics, we skincare three internationally. for runway and significant about growth

XXX our share continue by QX. tracked XXX consecutive basis quarters. In market progress brands you color only Out cosmetics, above for by In cosmetics category nearly brand we tracked is XX well gain channels, the Let share update e.l.f. grew me We to X%. to our increased on trends. category Nielsen, in outperform in QX, XX% growth e.l.f. of of points.

e.l.f. the X.X% our market with today see we has number few double three as share. share years. to As brand next growth great the opportunity been, share over is the Nationally, approximately an

national already longest-standing customer, our with brand number the nearly Target, XX% share. are one we In retail

to XX above growth in at SKIN significant growing and replicating e.l.f. of with number channels, success runway We is top a well was share. the number XX% In the brands. we the by points. In retailers. skincare, basis over XX share today across market on among category also SKIN tracked focused holding the brand e.l.f. share grew are We skincare XXX% key with the fastest outperform a X.X% other brand one continued category. Target our and QX, grew XX% our XX

brand Looking net U.S., in outside strength XX% markets in over which in Canada, share and with six QX, each both of Canada. the by by is and the our e.l.f number share compared one number in as market the fueling UK about these we share. growth over category grew international gains XX% a Xx the in the has sales pays X% nearly fueled XXx brand each. UK by in e.l.f. to

globally. expand brands Across We aim team and build of fundamental as the remain we international to to our three continue categories same. drivers business geographies, our our the

Our and innovation powerhouse marketing disruptive engine. value proposition,

me Let underpinned our in each strength QX. walk through how

the lip, First, for accessible We skin we’re concern. proposition. eye, beauty our every to make best face known of value and

the and Grail ability deliver high bringing from delivering to community them prestige taking an market, unique a at have Holy value. products best inspiration We our to extraordinary in products and quality

accessibility promotions. focuses strategy category. pricing beauty. We best proposition our brands The $X our the enjoy to the brands, higher the these average $XX over Allowing more compared value over for Unlike little and e.l.f. brands. $X mass as broad-based on a in prestige everyday price today of legacy point for for consumers creates priced value cosmetics instead is to believe over of

gains of up XX delivered in segments over growth Which of and QX. strongest our one make the We The is position second driver has Cosmetics of sales cosmetics. collectively in sales. our powerhouse or e.l.f. two XX% share innovation. number performance e.l.f. the these color segments across

product growing one-and-done build to launches. is franchises approach innovation instead of Our

four Putty, Glow Our Grip, grown Power and year-after-year. franchises, largest Camo, Halo have

continue fuel franchise at within we an new In grown. we our incredible to QX, franchise prestige innovation $XX each, Putty As price Putty compared a entire value with the the of $XX. Liquid the item at Poreless has to Primer launch launch of

Presentation] [Video

Brightener, We Putty also launched franchise time. our first for eye Putty category Color-Correcting the extending Eye the the into

disrupt We’re category using the this approach as to well. skincare

Suntouchable Set Our prestige SKUs. Whoa value Invisible incredible to skincare for latest selling January, our XX further XX. launch best item In our Glow franchise and is with are Suntouchable! at of compared SPF SPF one SPF at Suntouchable launched $XX a $XX the this an Sun All QX in great franchise We to we example. of of rose Whoa expanded Glow Sunscreen price the XX quickly

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how We’re our Suntouchable skincare community bestsellers. rising franchise is excited to with the quickly by our responding

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

generate new We with moments continue for to buzzworthy community and our collaborations. reach our audiences

million edition with beauty in With been launched Mikayla has social XX Mikayla we collaboration of top limited honor followers the June, named her across beauty wedding. In over content one of her influencers. platforms, creator Nogueira

sold Our limited of our Collaboration ever collection. Duo edition Lip sellout fastest in elfcosmetics.com, on XX minutes a out

the our ever nearly two rate purchasers XX% an years. launch new site new of highest saw last in highest and are also on spike to e.l.f., purchaser hour, We the traffic product innovation our during in

Table channels, form of her and social further content This two short with Makeup into digital release entertainment Over and new Makeup lean Vanity Talk. series quarter, across a we

first this icon the commercial big filming topping The Table comedic of episode while chart earlier Jennifer her and Talk game quips award-winning series Coolidge, this with for our inspired Vanity who cultural year. actress featured

[Video Presentation]

new record inclusivity, from continue over of company. We world purpose the as proud holder lead how XX who in with media kind obstacles. and different Pagonis, had adversity that beauty kicked we of a impressions models named Show launched who world. purpose-driven a to our collectively we blind overcome create I’m a new celebrity the proves paralympic with strive to is We accessibility buzzing to possible face featuring off bring in to captivated toughest series positivity, have the old even The and series. anything role viewers more Your(s)e.l.f. recently and series two swimmer Anastasia XX-year e.l.f. digital content earning billion

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To support donate raises organizations, year This e.l.f. that we Anastasia’s our our The of commitment to in for one donate non-profit mental annually profits to to is Hidden help part favorite to student of of health. drive prior Beauty’s lift awareness Opponent, athlete impact communities. others, positive a our X% hope

competitive Mandy, Before to call I to to a spend want turn over our about talk the moment moat. I

low a very brands While category beauty of to been is able of few barriers have scale. entry, comparatively

retail and greater only skincare past the surpassed million. than over years, XX have only For Nielsen, brands by context $XX three $XXX X,XXX of are cosmetics XX tracked and in over annual million sales

been With areas free, has able premium to one competitive consumers bring scale fair we and vegan, the products superpowers e.l.f. areas that table. trade through underpinned of beauty quality are are the by at advantage have appeal price cruelty can advantage. certified. to e.l.f., These accessible points of clean, the broad brands few other with of several

supply Grails. launch Our cost, our quality is speed industry best offers franchise innovation Holy engine of and our and in to building well the combination chain integrated with

team importantly, this millions the ability a model high innovation. and gives performance culture. have perhaps consumers against of we activate us engagement And most talented to Our

fuel the combination these, While and we fiscal other our our form to beyond. try some believe areas can XXXX of in replicate of beauty ability unique brands mode advantage our of to win and competitive

over now I’ll the Mandy. turn call to

to as I’m highlights for raised our Tarang. well share our the you, fiscal pleased as first Thank outlook of quarter XXXX. results

percentage sales digital results as and were products. both year-over-year, spring as Higher Shipment saw better commerce. robust Our international succeeded we points well and to contributed core XX with to grew items. growth driven approximately on first expected out growth. volume sales strength across quarter QX unit adding by net of velocities retailers, consumption this outstanding. We percentage supported response approximately consumer XX as to national mix QX net started innovation recover than stock XX% by points to some broad-based unit our in quarter

million particularly increase led to our to XX% consumption to ago. digits Digital XX% We as consumption year-over-year. Squad digital us Loyalty our channels enhance compared we digitally year-over-year. over QX QX strategy of X.X were penetration, as Our XX% Squad with drove growing triple Program. digital a further over our continues in serve total members year up trends well. see Beauty now has opportunity Beauty enrollment

elfcosmetics.com stronger retention have drive Our source our to XX% members almost frequently, values, rich of data. and a of on continue have and are higher sales loyalty rates more average purchase party first order

of FX rates, retailer transportation XX% was benefits year. mix costs, approximately margin expansion. related and accretive gross adjustments, lower to costs offset cost margin QX which improved inventory We favorable compared activity savings, more basis space gross points than to saw prior and and from up margin XXX

drove We primarily in line year. result of trends. percentage investment strong and basis, quarter for the QX basis, SG&A lower last On Marketing top line top in sales sales significant non-marketing year. XX% percentage our was an a digital as and compared significant XX% leverage line adjusted to with on given expenses, SG&A of net XX% outperformance. a a expected last in as This than our was was of

digital to approximately XXXX. net be XX% We continue investment to expect marketing to of sales and fiscal XX% in

our year and XX% EBITDA per XXX% margin diluted or EBITDA $XX was of adjusted was adjusted approximately was share million, net sales. versus million income compared strong QX growth, was $XX up to $X.XX net driven last $X.XX Adjusted gross expansion profitability share sales per diluted leverage metrics a in year margin The SG&A non-marketing expenses. million or ago. and $XX increase our across by net

Moving flow. to and the balance cash sheet

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

million Our $XX balance year our from ago. with a $XX and expectations line ending in inventory million up was

to our I’m about approximately strong fiscal As we’re consumer pleased through build demand support plans also one in the leverage a QX. we inventory to quarter reminder, flow ended last seeing. position of back terms debt million a less levels We in XXXX with quarter to spoke the the cash cash and in than net generated adjusted $XX EBITDA. total times free with

for extensions. to and priorities our growth investing cash initiatives strategic remain year on the behind our expect We supporting

in we’re year ERP investing include focused infrastructure, to capital increased transition of Some distribution the and to working as strong demand. initiatives and SAP this our consumer as people support our well capacity on

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

from between $XXX net $XXX.X now year, million adjusted of $XXX.X XX% share EPS we growth net up to previously, XX% $XXX million to $X.XX of between previously, million, $XXX.X $X.XX to adjusted up previously. diluted per income XX% to million adjusted $X.XX full to expect and EBITDA sales million up to million, to $XXX million million XX% $XXX from approximately from up $X.XX to the previously For $XX.X from

to adjusted XX count share XXXX average fiscal our diluted fully a XX% be expect of and tax rate shares. XX% approximately We approximately to million

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

QX an outlook in raised expectations improved as in for the tracked our as outlook remains both reflects untracked balance Our well channels. the year outperformance as to relative and strong, consumption the our of

now previously. favorable gross The outlook margin. mix. our to lower our result approximately points to adjustments our XXX In largely fiscal basis expectation XXXX, QX, XXX for points inventory we expect be in outperformance year-over-year up the aided gross up Turning as to a in of by and compared basis improved is margin quarter

terms and to retailer In and accretive are and cost continue rates, for expect transportation related costs expected costs, mix key from we takes space to activity the of expansion. benefit than to which favorable gross to the puts FX lower offset savings, margin more year, margin

Turning EBITDA. now to adjusted

prior of growth on year, XXXX. approximately delivered previously Our XX% the to growth EBITDA outlook up strong we versus XX% from of XX% XX% and XX% fiscal in now top adjusted to implies

The compared gross Our our SG&A outlook based expansion approximately on expected as expenses. year-over-year basis outlook improved EBITDA and of basis in also leverage XXX sales non-marketing strong is leverage net previously. growth, implies to points XX margin approximately points adjusted margin

both We in outlook in our to fiscal to our be year. position and profitability are a this early raise quite meaningfully pleased sales

we to XXXX. a summary, off In start are in fiscal strong

that Our have strategy. on XX the to performance basis a winning absolute both last the an we over demonstrates quarters, category and relative

and we across see in results the significant that we are even more have cosmetics, potential The these skincare gives for our brands. still as future. early us full for confidence internationally innings white great space As excited color the we of been, unlocking the

the call With that may now open operator, questions. to you

Morgan begin Mohsenian from We session. question-and-answer Instructions] come ahead. with And go now first Please question will [Operator will the Dara here Stanley. our

Yes. Good guys. afternoon

Good afternoon.

about year in terms full really growth your raising QX, quarter consensus So by obviously even in million. by guidance strong of but beat an another you’re you soft million, revenue greater or $XX $XX the

in out momentum give business coming year? the QX? of confidence that balance just I you more can us So Mandy And on what bit a of detail know pretends in your a in maybe the underlying touched to then Thanks. be can QX, on would given And detail help think specifically we you about strength helpful how it, in fiscal should just frame the fiscal QX? relative there. but bit QX more the

All so you right, thank much.

on with our let’s first start guidance and raising your So the year question confidence that. full in

a that position great to raise So we we’re in feel guidance.

of XX% standpoint, in the underpinned the on drivers and consumers. to remain business. our year, proposition, EBITDA drive The value that powerhouse from That strong of As end see guidance the continues and talked to our out the to innovation of first to we momentum really quarter top our XX% continue key year we our really business fundamentals business, engage and ability the forward. so by the full adjusted our the an raising our

ability our momentum to really And great to our forward. so we move continue and full year that guidance see feel about

In that. specifically QX around and of terms framing

track So all I that and get our you data, know if information. I look Nielsen channel at

Over about for a little we the say bit anchor frame to QX probably fair have growth if were and you. that I XX going XX% weeks kind of last place for to tracked try would that’s we a so to

from question go Please with our James. Olivia Raymond will ahead. next today And come Tong

bit even Great. expanding and that and want about talk you categories those? have shelf to versus as ACV more have just like think Thanks. the entering And you the in lip to of potentially Could eye space? about in the newer newer little that structure incremental we the also well. Congrats margin I then a opportunity versus talk face. the what a unlock about you’re categories you as some in

Olivia. hi So,

our seeing are strength across We entire business.

So that number in. grow segments feel we continue have one position. expanding extremely And to we areas there’s we’re about the where XX the or also two some strongly. good Those of

business think XXX% You innovation, a skincare up track in our channels It X%. relative I in talked to was about up category. quarter our the was lip

strong So all we gains of this share talked about. the leads to

we year-over-year picked points I of think up basis share. XXX

Glow, And an item been prestige margin then our And but of much our improved those And to primarily one isn’t unit structure overall at terms Suntouchable’s to to of structure, categories. between a mix, margins our our be we up value raised it’s of difference innovation in accretive of the there company. a actually all target margin margin of really some $XX, also relative We’ve ways our as we’ve mixes both but products brand. innovation that done still average through retails. certainly incredible like $XX, in the the Whoa at the

with question And Weiser ahead. our here go D.A. Please next Linda will Davidson. from come Bolton

I Yes. Hi. about marketing your just was curious ROI.

As spend bigger, you continue you more. get to

curious, the beating going was intended that seeing notion if because And that your I reach spending keep the you ROI you sales of you expectations growth of still plateauing ratio. on adopt are wondering or secondly, I’m So ahead so sales really up? much never you would is

you. So strong? Thank spending would are ROIs if growth, anticipating really you still the consider your ahead

is This Linda. Tarang. Hi Yes.

in in continue along our of the about then It’s rate, marketing delivery lighter we first in with of top quarter and really rate just of was wanted. than has sales It came what first over and marketing of great we with one drivers our the our And to feel line terms of XX% to spending We investment. really that business net the see the do quarter. exceptional the big in innovation it. would’ve ROIs

of to the So year. for that we plan the catch up balance

working. still and of We’re of see to net guiding XX% because sales primarily opportunity. marketing towards XX% We plenty it’s

ahead. And JPMorgan. next question Teixeira Please will with Andrea come go our from

by a and you. that’s quarter, being Tarang touching about you second think the rate. the just run $XXX roughly million, did like Mandy afternoon around It seems million and so my math million. called Thank $XXX $XXX new quarter I Good just congrats. you

thinking of million it’s your So just half, the to guidance. get of the $XXX top that second so range you the

you you top your thinking getting the I’m we on remarks, as being shelf UK both and the you’re thinking more fall, described and to Canada of Should we on forward So what now? look fourth a additional continue of space. be prepared just get runway. the of fourth level of I of even where be that player to quarter is lag think if closer relevant quarter? growth that So build, to very should you’ll thinking we type the

grow. run should you be has again, to you. seems your even room – guidance obviously like through to a So in half, quarter? thinking the Thank we It were more added rate the second how the added of progression you question, million the though $XX previous but the than you adding quarter, still in

If on you can elaborate that.

you, Thank the Andrea, question. for

how but end And across time as flavor don’t provide want we’d So on you if guidance out we did XX% see for what a the and breaks the strong. again our extremely for I guidance, it at quarter to know, some know. a top we for at that think is you year the quarters, to you take might as QX quarterly give like about we

of earlier, particularly in space about business to CVS As the point, have expansion Ulta, do your we And I we fall that mentioned yes, have with remains Walgreens and the the previously. coming talked strong. fundamentals

And about But we’ve think how just see and if I we points like, building that blocks seen strong to excited XX what QX. of growth materializes. so that looks in unit growth unit really really talked about and

still – we productivity our But through the and helping space are gains lead continue digital we by continue and AUR. believe expect our that And so itself. drive seeing. to of mix that’s can really that a guidance. great results growth that momentum Space to gains our as spend will launched, we’ve then raised our with we’re to that indicated think driver that. to innovation marketing the complement And with productivity I And versus the just is drive, volume to coming we’re able main we sales if that in the about productivity

next question Anderson And from Canaccord will here Please go Genuity. ahead. our Susan with come

Hi. Good quarter job Nice evening. again. on the

digital the you or curious, at again, are than Thanks. seeing row, guess Is shopping what then in in growth, looking new quarter stores online? consumers now marketing? are Just more And the all second a once what’s they the I are I’m driving now? these also, doing guess, acceleration? online different Or it I you both? triple-digits, now that consumers are

is Susan, Hi this Tarang.

We’re progress. our digital the really business and with pleased

As you mentioned, grew by again triple-digits. we it

our is platforms, One of we’re penetration XX% now I’d and working through say, digital that site, main our year. social drivers. oriented, two to very certainly Our the last our that most is getting people to XX% ROIs And through is digitally relative there’s is seeing there. marketing

big of our Loyalty as is But XX% think, Beauty members growing now the over Mandy the second for business our Loyalty driver a I digital they And driver account digital Beauty Program. highlighted, members for, our X.X business. key million Squad Squad year. are about

seeing not our we’re is results So last I’d as we great on And with strength have as retailer.coms. well elfcosmetics.com only really there. really Amazon the then good say thing but business

And halo lot so see our retail results. our helping we a propel digital a efforts, of benefit also of

come Please question Bill will next go Truist with Our ahead. from Chappell Securities.

on afternoon momentum. Good congratulations the and Thanks.

as bigger all kind market? there the versus we Squad color – Thanks. Just skincare, a coming way forward. existing just should are – is going understand, also customer of is trying of of be it of break to coming out we a of that a And how into how kind to channel, to kind having at better? in is there again, understand trying the doing on to or this the more consumers there attract basket Beauty Or much from new of look and Target breakdown is what’s a way color that’s specific terms maybe it driving growth

down Hi a Bill, you. can bit little try to I for that so break

XX% we channel channels as really a weeks. across that XX strong. seeing tracked growth we’re our we’re from strong, channels, latest We When business. are the standpoint, growth digital the just So in talked Tarang the think entire right to, seeing retailers are spoke about now, driver our up about results

indicates So that continues channel you be to strong. the retailer to

cosmetics growth both about Canada Even UK outpacing well. in talked skin and in we those our the we’re seeing and as in category the where standpoint, color growth areas a internationally, color From the outpacing category.

we the of in when So seeing segments. every the we are look channels, segment across board, growth business across nearly across

that. with And really so we’re pleased

we an XX% the with The which In what Mikayla as of terms from into example consumers most out highlighted new that seeing new any recently. was consumers, collaboration new Nogueira we’re of seen launch standpoint. did we’ve collaboration, a that done in also that that consumer and we of we’ve bringing

we’re that growth, excited So the seeing across really the from to really it’s really one business. a fantastic just and place, see not but trend coming here

from Lizzul with And go Bank here ahead. of come question our America. next Please Anna will

Hi, good results, afternoon. Thanks the the question much very for on congratulations impressive. very and

current looking of diversify shelf network. your I’m about Thanks. for the to feel very in gains model successful do space This has wondering manufacturing in demand think and with been increase to past, the you products, if we China? As the in working your third-party still your but you’re or expand manufacturing comfortable your model

But degree additional is terms great as We and Hi And like-minded we feel efforts, meeting talked Anna, quality we combination highly have the of that operations through been advantage the a we high the of diversification have chain our advantage resilient the pandemic, those we in has with supply very up we have consumer over really that of chain coming same strong in suppliers speed. Thailand. demand cost, the out that been about pandemic, started also we of supply taking and we have. best doing suppliers. have control

We’re as looking at other geographies well.

our continue over in really production and So improve a infrastructure. majority we’re in from what also we of that the and also terms if see happened our elsewhere. love going China, we anything to of our advantage operating in distribution investments to standpoint, be where the capability business could be sourced to But we’re vast making we position time, have continuity a

go from Our ahead. next Sandler. with Piper Korinne come Please will Wolfmeyer question

driving the and the I’d remainder quarter. Hey, for the bit expansion gross good what year loaded an of really year end one-time saw of what’s afternoon. expansion Congratulations sustainable margin backend. the of for really kind that maybe you dive the front in and Thanks versus puts QX or is taking in like a versus maybe takes more awesome more into outlook and the to in more the on question.

how of spend the this or quarters? the Is and marketing marketing And the the to then the it equal for of about Thank should up remainder more be thinking back throughout increased we year EBITDA going thinking be it is you. year? cadence about probably the pick towards half spend, to across going

Yes.

are So at on we pleased of the That’s in top outlook, gross basis on the basis XXX of margin really we to margin be gross points in XXX outlook margin points in gross improvement year-over-year. fiscal improvement delivered XXXX. of

And a innovation from as cost higher talked well. you – as savings, do being QX benefit are introduce spoke that earlier as takes driver favorable gross our to margin we think mix so we a for so about puts that and and the our we FX a rates and to getting we when margin we driver today, about have

are costs, talked adjustments through. this starting in quarters inventory transportation we’ve And we flow had also QX. then for to Lower We that quarter. as couple lower past the of see to started

look at basis in lower on As quarter. we take that reserves quarterly a this came we

in and quarter-to-quarter. I one-time flow what’s ebb And versus the that about adjustments that sequence, inventory so think not will if from

on nature. also I flow. the more I one-time So If think longer and will as that ebb FX think arc in about

to quarter. basis gross our been this to forward. happy we’ve outlook to margin pleased so up our points continue take that And we And really XXX see push to can

that marketing looks from and the EBITDA standpoint. balance and cadence standpoint range over to From from targeting year, that spin a of marketing the XX% a still of the are we an how XX%

quarter see how I up to to but will that a get so higher of through year. the vary, to comes range QX, that by be in QX by XX% spend we expect ramped end to the targeting spend would And may XX%

Helgans will Please Jefferies. come go ahead. Our from question next Ashley with

thank for congrats quarter. on questions, afternoon, Good and and the you our taking

categories explore we’re So in to become you’d curious leader adjacent being and Dupes hair fragrance and if the Dupes popular super ever in like category care. fragrance starting the see

There’s twist we our after, I bring Hi well, what working, always that that more either formula our extraordinary our own quality take really between go being Ashley, to think able is on We we community. think put prices. than e.l.f. prestige from or approach meaningful differences inspiration whatever is prestige I at and these Dupes. always

at right In now we’re looking skincare. category terms I’d of say primary adjacencies, categories, cosmetics is and but other focus open color to our

white color much cosmetics space cosmetics, so been really those. [indiscernible] able X.X% number and both bullish CoverGirl of the And year, passed in position color about that gain three Revlon perspective to and both in have We last in sustain for the for I’m we share we’ve the share. at nationally

But if I one number look brand target, clear we are an retailer share. the at our longest standing with national there XX%

white we market over have space. I feel opportunity double more So few years, color to next an the even our share and cosmetics. perhaps Skincare

growth our only XX%. a relative XX We’re we X.X% while skincare. to market the rates there I ago, in little about but now have brand still the at talked share number leader

So both other color plenty in to tackle have open while to adjacencies, I we skincare. we’re think and cosmetics

come Stifel. will Please from question next Astrachan Our go ahead. Mark with

just to afternoon, Yes. the the in user think the the the skincare And related franchise that, driving of do you there about how think of skincare sort becomes much business? legacy being e.l.f. category far about in to with so percent trade legacy versus e.l.f. forward? everyone. the going the bases sort trade bigger into both with and the of a of that as are users? ask consumers of how terms wanted Thanks, skincare about What’s And learning skincare and overlap who’s into of growth I new of product How buying mix. the the you terms are if do business?

say look the primarily in our at I our color housed e.l.f. at like consumers. where places if set. our skincare same historically with business, is Mark, are So our cosmetics Target, skincare cosmetics consumers skincare Particularly I’d

been And good really I that our a additional they’re items. in, basket builder I think and has of think model as so productivity buying getting skin currently

we’ve the primarily in lot More more innovation. new users a come through seen recently,

a there the about Glow, talked Suntouchable! entirely portion we those been we e.l.f. to consumers Whoa launched big franchise. volume the of new So our items of have the three

a going can you’re And see the forward. think overall as think we I I we have more good a it mix franchise. and So go consumers on very skincare pipeline we use to particularly, to attract you new to

Jon question go will with ahead. William Andersen from next Please Blair. Our come

reached if going everybody. helper? which transportation of the gross Congrats level margin been margin. currency and on the follow-up. to quarter. front wondering ocean costs have we kind good aiding or freight Quick the Hey, costs, Are transportation I’m gross a rate benefits, additional that and great forward? on question afternoon, Thanks. for just Or have there incremental benefits of run FX the

John. Thanks, Yes.

a transportation benefit from flow standpoint, there’s through. still So to

we the As P&L. and time know, costs those you to takes through transportation capitalize flow

So year-over-year expect to also I On balance the that be benefit of year. for a us I to expect from the standpoint fiscal FX, a to continue those would XXXX. through

standpoint. has that, are at for on we looking As and us favorable been year-over-year remains a that so

will Our next Oppenheimer. Rupesh Please come from question with ahead. Parikh go

on Thanks Good Erica afternoon. This our is taking for for Rupesh. question. actually Eiler

term a have So of two part sort question here. I longer actually

digit once for top you that to So exceeding guys algorithm top growth are mid I set mean, high obviously out line growth. single longer term line that you had

expansion as on what growth on mean, if still thoughts now over second, curious your first would And there are is any about at could share the longer your longer the mean, business? margins here? for ceiling And – margins top you term? line state thoughts then think I like opportunity gross are the any how helpful. be look could Just Just new XX%. gross for steady we you I term, there thinking

about consistency We companies but out we one at that So seen are quarters we’ve XX on of of XXX we level over feel have in consecutive talked consumer of XX% of that, not the that have delivered we and and recently. algorithm, of that over time, over quarter terms the five average growth long-term that about so per great revisited time. that growth growth momentum

long-term. and us ahead. and our drivers we space We’ve on And international along we color, have feel believe talked about growth the for skin what opportunities so about road can great be growth across white in we that over the the

terms we that margin say margin of what margin we that as core gross to we innovation given gross to will any other mix we believe that target standpoint. The we and and see launch vary. a year-to-year what looks do that like favorably long-term in we gross believe to levels can And a haven’t than feeling from there,

And add only superior a thing there’s we’re delivering margin Yes. ensuring between tension would I is, value gross the to equations. and that healthy

to make So Mandy margin we’re plenty standpoint, a great would cost gross value. think there’s through from really delivering while we innovation our – also as of and sure I mix programs, savings be want said, opportunity that

And our keep up so there margins gross an taking eye versus we’ll too high.

question next Cowen. come with from Chen our ahead. And Please TD will go Oliver

Oliver. Thank is for on you. Joanna This

pressure. back of in just loans comes products Thank international of under as consumers and at income strategy, of How the And curious you are do and might think prioritizing remain and you. come student lower versus about growth markets point curious now sort Just differ which strategy positioning U.S.? the sort on also payment back your how your your your international this point? the markets you pricing

on the environment. of environment equation. macroeconomic overall very the consumer that positioned keeping an eye and well So feel value We superior we’re we’re

paying Our $X average take quality after bit over us good legacy are our $X close over and to as color little We up to. cosmetics feel We well feel ratings given be retails particularly brands $XX for that, compared after almost a really year. about but we’ve continued for and year prestige. attention unit year sets to we’ll up

pricing the that us feel to positioned. point, We well additional will did up XXXX. keep to the also we But we’ve of U.S. pricing around take not we take in to catch in March on then internationally pricing may And decided the

competitors We’re some perhaps hearing now. rumors pricing right taking some of

value our stronger stance So get we feel the as will equation that we have. perhaps even take we

UK our Europe. has in a about then building number And identified terms we’re of internationally. we UK. we’re bullish can We expansion, in the the on of Western prospects that we’re other international that tend We the feel we out our first strength, We entering. have focus enter. terms team and talked got in the in other countries depending momentum Canada in in kind are announcements those Europe. countries enter we quite of But The the UK say have UK. and make Western of in can kind the we of there to I’d would quarter-by-quarter where proof-of-concept We’ve our be

we done about, good Nykaa, feel retailer in also business an beauty that’s a have well. with India We online extremely

there. that enter, be feel can additional business and disciplined to there’ll of we we will probably markets So a the in go but first then order markets Western fill out from Europe way

back our closing turn and the to session. Amin remarks. the Chairman Tarang to over for And conference like question-and-answer CEO, any I’d this concludes

upcoming look I’m again some Beauty at joining we’ll Thank at for results. We and November you to our speaking you when of second our e.l.f. fiscal proud you start so you thank to our for results incredible Well, in XXXX. quarter be of outstanding discuss well. investor meetings and with today. delivering us team forward seeing

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

lines. You your may now disconnect