e.l.f. Beauty (ELF) 1 Nov 232024 Q2 Earnings call transcript

Thank you for joining us today to discuss e.l.f. Beauty's Second Quarter Fiscal '24 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. Since many of our remarks today contain forward-looking statements, please refer to our earnings release and reports filed with the SEC, where you'll find factors that could cause actual results to differ materially from these forward-looking statements.

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

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

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

Thank by the of outlook QX, recognizing Beauty discuss for the you, we 'XX. I our results drivers KC, e.l.f. everyone. basis our we good gross team Today, and grew and sales for quarter. want delivering in increased XXX will another and fiscal by QX raised XXX% year. million afternoon, margin $XX to In start by up versus points phenomenal delivered XX%, EBITDA, net adjusted prior

companies. XXth in straight only sales X We're putting consecutive our of growth net of public e.l.f. consumer marked companies quarter. a sales that XX of Beauty group least for out has grown growth, at XX% per consumer X QX select XXX quarters of quarter high-growth average and consistent,

in runway highlight to continued We've international. growth X skin with significant care and for color areas cosmetics,

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

XXXX to than from We X.X% market since about have more doubled share our XX%.

points share top our year of are year and last building strength on QX We gains share in XXX upon our before. of strength with gains basis the

the Target over share. QX, the share, in nearly opportunity X with an see In double ago. XX% level our share #X #X the approximately next was just national with In longest-standing customer, Target, brand of years. few XX% retail we're nationally brand we share double our had approximately e.l.f. we momentum, our the years Given to

and retailers other progress that success partnership are ambition. at towards Target focused key are and on replicating our making We across great

XXX% care, XX channels, was category. XXx ago. In share rank growth to increasing grew We category skin in tracked outperform points, the top e.l.f. brand SKIN among basis to as and #XX brands. XX compared to year care skin the our about grew the XX% continue by #XX we our the fastest-growing brand In the QX, of a

e.l.f. Sandler's runway for a is XX%. e.l.f. year holds teen remained survey, #X Cosmetics a season. XX brand XX cosmetics significant great seen brand percentage SKIN by versus last E.l.f. share nearly of ago stock the Gen we've indicator Piper #X fall the these favorite consecutive growth a points strength. brand We believe holding drive XX% with taking today We and favorite, Z in X.X% to teens recent a remains helping our share. with the share In quarters. grew the fourth share this

third For has the top elfcosmetics.com perspective, ranked e.l.f. skin the destination brand site survey no past teens only on for care favorite for time. surpassed even XX% the in XX and in list. was the other shopping consecutive cosmetics XX brand years. second beauty a brands for top the SKIN the X was

share by Xx Looking in fueled Canada, QX, Canada e.l.f. U.K., our in gains in sales and outside U.S. in each. strength category the outpaced more than net the and in grew international by XXX% growth U.K. than We the more fueling XXx

globally. our and in in the runway We X% share. Canada #X with share X% the expand U.K. the brands is see today to brand #X a e.l.f. significant brand with

X relentless continues on Our results our across drive focus strategic brand to imperatives our portfolio.

our through strength in me of how strategic these underpinned Let each walk QX. imperatives

brand build to demand. is imperative strategic first Our

and launch We beauty. limited redefine to short-form boundaries with collaboration and break in in what's of content to fruit, go of record-setting to In X engine as collaborations. the female the Snooki. marketing underscore and disruptive gamers. gaming, content entertainment suntouchable into of QX, edition further entertaining known We the the SPF our August LuFu, [indiscernible] into the with top with digital importance continue Our possible continues Leaning Georgia franchise. [Presentation] moment into short-form a world's nostalgof also makeup Sue in we Icon gaming leaned

collaboration We launched another record-setting in September.

inspired As limited of Coolidge, shoot. icon pillows. we our new building outtake collection big edition our part actress with game by dirty lift to continue Jennifer reach strategy awareness from campaign This launch cultural award-winning and reunited to audiences, and was commercial an and

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at unscripted an elfcosmetics.com took created that Speed. and moment premium e.l.f. a launched on We lip collection

where world explores dirty first. come a Our campaign one's lips always pillars

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from been response has our incredible. The community

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reach us Our driving benchmarks is multiples marketing new investment industry above helping working, audiences. and ROI

improvement attitude broad-based recent seen most we've the study underscores XXXX. usage and Our since

brand points Our to set. highest our the jumped among competitive XX%, XX satisfaction

with unaided what a cosmetics to the sparked Our compares illustrating unaided doubled brand at XX% a it to means awareness steps growing brand our U.K., in today that to the XX% community-led XX% XX%, our success the that When in opportunity to e.l.f. forward. awareness an has U.S., upon movement. asked we the again first-ever them, in leading from as Building to double brand awareness U.S. campaign. U.K. move took U.S. our accelerate we mass campaign in community we the fueled

the lit pop-ups your screens hash tag up social and express to XXnd everyone In across our involved stations, get spot e.l.f. [Presentation] experiential digital with September, tube encouraging U.K. U.K. first advertising and channels,

e.l.f. digital. with to only brand a remains power the mass X Founded cosmetics strategic imperative digitally top is own site. second native is direct-to-consumer Our our brand.

up ago. total drove boasts strategy terrific and app, QX downloads. We're led digital our Digital over year a well. X.X-star of digitally a engagement over which Our a were business on us Cosmetics now in XX% rating million continues bigger e.l.f. to compared year-over-year. as to seeing mobile QX XX% channels much X.X consumption XX% consumption trends on serve our

of monthly most active traditional are members. Our transactions growth over Squad X.X over with loyal the has that Squad Beauty And our million XX% our XX% over on year-over-year. retailers. enrollment outpacing by app user Beauty members loyalty is of driven growing now beauty

of are Our our ecosystem, almost driving key a loyalty our members part digital elfcosmetics.com. XX% on of sales

strategic lead innovation. Our is third imperative to

extraordinary have prestige inspiration products a market We taking to them the and value. to unique and Holy Grails our best ability deliver from at in community bringing

a In to XXth Allure we consecutive awards of year innovation the receive year and marking Beauty continues largest the industry of Best awards, Best in Beauty Awards, Our of won e.l.f. a of X highly Best the garnered Beauty our number products coveted has award. recognition. of single received

X has Our category, Cosmetics sales. position e.l.f. XX built the over color the cosmetics #X across has time. innovation collectively engine or segments of which make up of category over e.l.f. leadership XX%

to and each. in share strong deliver continue growth gains sales We

imperative Target per strategic space earning drive X drive linear our is with partners. Walmart, and largest fourth foot continues e.l.f. basis Our to retail customers. retail to on a both additional with partners. us This with is productivity our our sales best-in-class productivity productivity

in in Walgreens. space And in expanded CVS we reminder, Mart. Shoppers Ulta spring XXXX, space expanded Walmart, a fall we in Drug Target, CVS As XXXX, Beauty, and and

launched boots our be our with and month, in announce in to we spring U.K. also in expansion. [Presentation] Shoppers furthering that De Mart e.l.f. Last in with XXXX space the Drug Glass, expanding we'll international We Italy pleased with are Canada

while line Our top non-marketing leverage expanding a We drive deliver gross fifth SG&A winning growth. both profitable expenses. we've on also top initiatives our and the margin combination again marketing EBITDA Supported strategic growth, our formula expansion margin. and of Since strong focused flywheel our delivered ROI on QX imperative is strong line high to been expansion. this our XXXX, behind to sales digital growth growth, investing with EBITDA adjusted adjusted of in in by margin and

to we've our investments we As continue grown, in make infrastructure.

increase speed year, of planning offers optimize and the best This our industry seeing. begin fiscal profitable quality of to team to we'll We implementation these capacity pace to well continue consumer make keep we cost, us ongoing this investment, SAP infrastructure and strong continue and chain our to continue Our adjusted combination demand operations core distribution and to we're processes. in also investments able to We're our support deliver been growth. with to with Even XXXX. the drive to our expect position EBITDA believe to in has expansion investments our growth. supply ongoing to in margin

fast-growing and mission disruptive approximately the on The In brand Nutrium care employees early a sales presence a October, acquisition basis. family. accessible we officially care skin closed welcomed on X% all. stand-alone the of on its team high-performance from XX% is doubles Nutrium retail to acquisition our to e.l.f. skin of make to Beauty a approximately of passionate to

post-closing we the ahead at growing approximately to We're [indiscernible] with the look and exceptional has X in CAGR sales see the days last still years. growth the realizing net seen significant opportunities XX% brand. over forward for early

Our on that both our create to that unwavering the our different lead I'm of is continue executing strategic beauty X company, driving proud we results. we strive imperatives time, purpose same purpose-led one a with At driven. as focus to kind and is results

go with annual shows in how business Our more drives purpose demonstrates how report these It September positive further hand-in-hand. successful impact acting second impact to launched outcomes. our

our culture to commitment U.S. spotlighted by people recently was Our and

companies, were by to who work Newsweek X Best e.l.f. recognized Report, named America's Companies Beauty in greenest to as annual our recognizing progress sustainability. World & its of News list We of For. also

the beyond. In relentless win believe and skin to coupled our in and cosmetics, with ability we'll fuel international, strategic space continue our our focus we fiscal on 'XX to summary, white in imperatives, color care X

over Mandy. now to I'll call the turn

share for results Thank second of as as outlook fiscal to you, our our Tarang. well I'm 'XX. pleased highlights quarter the raised

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

top with approximately percentage by cosmetics to sales to grow which according higher volume, growth the adding units track net XX was Our to e.l.f. was growth, contributed brand mix points. led percentage unit channel data. X only points approximately XX

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

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

investment for We in digital expect to and continue range XX% to year of the full marketing 'XX. fiscal XX% the

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

flow. the balance to sheet Moving and cash

our us balance positions believe remains plans. strong, well we to sheet Our and execute growth long-term

Our X things. expectations $XXX ago. up ending $XX inventory was year line a in The difference with a and our of million, million is balance from combination

last we to through back 'XX we're seeing. said we consumer levels build fiscal As strong quarter, the to our plan demand support inventory

million $XX ago. quarter ended Xx of leverage In to China and compared QX. the addition, here with enters the U.S. it it quarter in also in I'm position the approximately cash when taking $XXX in of EBITDA. result balance free $XX We ended flow cash when debt the pleased with the is with center less a from versus terms total cash million inventory to the approximately of million in ownership million a approximately on distribution generated we than hand of our year We a of ships cash in $XX increase adjusted net

and as existing to early quarter the facility acquisition, access Beauty using October, well in represented of management, cash acquisition. million key to we the end, Naturium stock million as issued $XX shares. XXX,XXX founders the credit Subsequent on approximately which to our largely We directly e.l.f. $XXX and funded closed hand

position relatively with post strong less leverage our remain with transaction than be to leverage liquidity EBITDA. the X.Xx net expected expect to We low adjusted

for this to across continuing focused initiatives priorities on remain cash include our behind portfolio initiatives on and The brand our to and our people supporting infrastructure. in extensions. expect investing year growth strategic year invest we're We our the

capital working consumer Our SAP the to as ERP seeing. capacity demand to transition as support we're increased well and distribution strong

Now for 'XX. to updated let's turn our outlook fiscal

the As fiscal we another 'XX, are positioned half look year. to second to industry-leading deliver well we of

business underlying year well of as to full in Naturium. momentum our ongoing We raising are reflect outlook as our the addition

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

expect rate be approximately XX%. We to our to 'XX continue adjusted to tax fiscal XX%

expect shares, count up approximately Lastly, average fully previously. million share a diluted we million now from of XX XX shares

start As sales adjusted XX to acquisition XX, EBITDA contribute Naturium early will and in $XX to results a ending our of to in approximately Naturium is million months closed expected net in reminder, the $XX October, in generate XXXX. million QX. Naterium March of and fiscal The

fully and in adjusted a basis in sales $X.XX EBITDA million $XX approximately our million contribute adjusted fiscal to Naturium expect to in on net in $X diluted EPS continue XXXX. We

provide additional the organic outlook fiscal starting me to raised line. Naturium, planning previously. On 'XX, to up of net approximately our XX% excluding you on XX% basis, with from color XX%, for with growth XX% our top sales assumptions implies acquisition Let of organic an

our outperformance reflects our in relative the of expected saw for the strength well outlook the as raised as balance we in expectations Our year QX business. underlying to

Let moment me channel Nielsen trends. on spend tracked a

our data reminder, acquisition portion covers tracked sales. sales. a As of tracked our XX% channel of accounting the represent a for about of only channels When Naturium,

balance the of channels what you me stage recently Let the see for and seen year. could some for context in provide the what for we've set tracked

our context, on X-year were tracked exceptional QX relative results with growth e.l.f. to both basis. a channels, in X-year QX For and accelerating

between growth. look to QX, we As we to growth XX% tracked believe QX range channel e.l.f. and our XX% could for

that could the level cycling. basis at quarters, to be at and higher quarterly, are continue drive can we've above Across we of the growth. or towards that tracked compares the consistent remain XX the XX% QX, we the see range lower In end in channel track channel In the trends weeks. range we given X-year QX, end and a of on latest we we X-year in exceptional seen X-year could base be sales category-leading data, both and

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

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

turning to Now EBITDA. adjusted

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

pleased our be delivered and are sales this position a to We In phenomenal to meaningfully net summary, second both quarter. again we growth in profitability outlook. quite raise

us innings confidence see Our XX disciplined are behind we that and of quarters. our the driven the imperatives our The over space X internationally, skin still white results full potential execution cosmetics, significant care in color strategic gives last across the category-leading brands. we behind early has unlocking

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

[Operator Raymond Our first Tong James. question with Olivia comes Instructions] from

quarter. great Congrats on a

if you quarters, my the beat sales previous $XX than $XX beat the the least September million. at up Naturium by you're question, the by consensus and similar up we adjust more So million, base quarter, on raising first by to guide

can so on little So seeing what talk you're in catch data. and a performance about just you the non-tracked about seeing referenced you're track this Maybe versus channels month? to date Nielsen trends could up far the just month? talk this You channels us bit you

much so for you question. thank Olivia, the

again, business So overall. the feel about great we

demand ahead we numbers we we us, behind a And end, international, we from really digital and of well. trends our noted, on the lot white XX% untracked think to as our inclusive did about brand, that adding we're on encouraged based that up did have As you into guidance. that why and momentum side and the house. to of see raise and raising space Naturium performance the and our about that the our we fall Again, of channels good channels, when untracked Ulta guidance coming some of that feel that's is seeing, the strongest top

business both us feel as guidance on untracked on piece the And as sides XX% to piece, business the of around that the well so to we encouraged top of really all line. on great which up track the the take

next Morgan comes with Mohsenian Our Dara from Stanley. question

you your channel to over similar arguably, recent momentum in Pricing about had off contribution So averages of naturally slow bit. momentum QX, track talked pretty to time. of trends. sort and the you've continuing things ton drops QX a But and a remaining

and a give place shelf you that in us updating have continue over just X-year trends So average your that level on and us sequentially relatively is with confidence the that? pipeline part innovation maybe of you in that sense expectations And the of how can changes next space and what's few line quarters? of driving

Tarang. is This

engine. comping delivery in that bounce we the said, bit XX% behind marketing innovation great feel Mandy equation, in growth value little our a As we're business Nielsen our around half, seeing, Nielsen. we're and going powerhouse that to about naturally the back is XX% to fundamentals particularly the the between trends and given

going what's on in to from on see period. we could depending base So Nielsen anywhere range XX% XX% the

X-year still the strong. are said, incredibly Mandy stacks As

with XXX things price. adjusted back, That's points really And few double growth we've look of brand been see last we're astounding closely net national few customer to adjust years, share our And again, it's fundamentals, step the if basis pretty never sales we their our retail correlate the our our up market most EBITDA On stronger. share, market growth. And X of to strongly all there share over share. close longest-standing share I the X those, share, doubled are we that growth. point an opportunity, of where we as picked target #X share at XX% while just a we've I In terms next as years. that and over

feel what to terms standpoint. from do share I of we a really in So market continue great

Net you is XX% range of sales growth, even EBITDA adjusted growth higher sales Mandy told end now is and top our growth our growth. at XX% net

that at noting So you'll focused we on, talk of and strong, our brand the important to retailers those up terms the productivity Superdrug picked fronts. subsequent quarters, on We at most stay and of been of and pipeline retailers, the that we're shelf great with we thing is productive continue core other feel other hear up the never be again, And see terms fiscal we're feel and -- additional continue we Target, most space And to Boots. continuing space we the us has momentum. about innovation I both pick in a drive momentum year, stronger. in This space. great in and space, fundamentals Walmart will then ton innovation,

winning light EBITDA grails holy continue and has propel and our our can't have been seem the holy to top these the that get that formula continues shine of on We adjusted to to through to ability those enough a margins. our line grails consumers marketing

question with America. Bank next Lizzul of comes from Anna Our

benefits in gaining this your share in are And shelf incremental gains. splitting just I that shelf-space any if to SKIN, e.l.f. is brand the was in seeing regarding down how strength all results to space growth trade whether you market gains cosmetics? and versus this addition you're wondering

Yes.

hi, So trade do say pie standpoint. say, of I a from I not mass a to well beauty seeing sides would both would continue down Prestige Anna, overall, we're wholesale from into the

that awareness driving increase think the into We've quarter Z our bring thing is Gen we're doubled has few continue X past over performance, millennial the years. And more we well. awareness I to brand. Gen-X, what seeing is really behind allowed as for our the that pointed really and so to us in brand to e.l.f. And this penetrate

more the so really into do well. franchise coming us folks think served And I has

by growth, You our as really is sales to unit can in encouraging unit see. which of that volume, I growth also really quoted points see our XX is driven

areas skin we after. And us. that sets SKIN, care, certainly on have making shelf house areas our color we're that e.l.f. our of the retailer. care we on on as feeling space going space It's skin separately. depending and of do white And that have we're either it on as available cosmetics, And get of especially We've for in housed think about those great are we those the be or care a skin with sure gains, best our continues From sets we out shelf with focus how so cosmetics where the a color we to side. priorities X called well.

our sales talked have XX% represent past of We almost skin about seeing elfcosmetics.com. the on care in

So us know for penetrate continue big retailers well. our there is skincare as that opportunity to we within to a

other about And Naturium. care would of we're the business. excited skin It our is now thing of presence the XX% only acquisition in our with to tremendously doubles I add

in care that skin potential. incredible realize We have assets to to continue growth X

question next D.A. comes from Our Linda Bolton-Weiser Davidson. with

times advertising Is a stage comment do the that? awareness of You've in or same are add TV awareness? in there Do next international markets. you wondering, different just of the of actions? kind jump-up next just stage? in in need recent maybe I it you of the something more your the on Or increase Can new to what need about couple fuel you the on brand years. And was talked in call do to to

Tarang. Linda, is this

say taken up is all, over the levels working. of we've it's time because First reason of part why marketing I'd our

ROIs strong industry benchmarks. multiples above exceptionally have We

still of awareness And brand doubling led that XX% that's so opportunity see a We an to in as continue to invest the XX%. we And more. greater standpoint. turn, to awareness awareness from that massive us to has, talk, brought

leaders sitting market XX% the at said, about unaided awareness. we As

but forward is combination strategy going led Gen Gen And digital has in new X well so Z tactics. we're millennials our approach, the what's only worked for us, as bringing not and amongst more leadership a of as which following to

we net spot not big the that broader past One a consumers much know of of may a this cast to why e.l.f. did on the was able year reasons being game to

And really we launched be not strategies to find the both campaign those great to continue feel awareness in only U.S. our recently increase about. U.K., effective the our we awareness and in

to going retain to people see disrupt the resonates way you're and continue So us to do bring that and continue in them market franchise. continue into community with a and to more our the

next from JPMorgan. Our from question comes Andrea Teixeira

well seeing Tarang, in the as the in innovations, wonder especially share. can spaces you white Can channel about comment especially be in lip your potential a been SKU interesting, towards your stockouts And you progress my a some in little market on and the mascaras, power I've you our relative skin which what bit checks in So you lipsticks to spoke as how having lip market objective share. in of oil. similar

were I if just capacity fast able you if plan. your And improve improving? execute very embedded wonder more, So you response to curious I have anything Or share you in recently that there guidance, of have to would most But say, obviously, that. market. you is do in the to terms getting a can

been has just the Sephora get that, into were to -- has to past, related very increasing then And [indiscernible] Canada. in I awareness. And able know we there also been

care opportunity be of products for Is of it's core going there Naturium if to wondering into products on everywhere. even taking hero other the so you the and part health? course, Or chance expanding areas? the also in any mostly can see Just protein your further

Andrea.

every say XX conquesting would some I So again. other these leadership across categories. of about bigger We competing cosmetics. category. in We're our color talked progress also We're tremendous of making we're subsegments

look almost and So if quarter, skin the for that doing the have XXx care, I awareness the category really by feel up in that we innovation SKIN e.l.f. we're where great I the XXX%, there. at category driven building was was

inspiration innovation, think On where You [indiscernible], as share do it community from ago product also approach lip, while [indiscernible] a this and mentioned taking priced we've prestige a good they a well of to was lip. progress seen in to listening had really I to them liked, our our our had but we're that constantly prestige, has at lot with $XX. as community but

quarter few first priced a at weeks $XX. it loop this just in mean, it's just you launched out seen we out. ago, our $X And we I incredible at I that oil the versus past think put as So time prestige we've mentioned, risk sold

We to continue extremely and gotten significantly and you'll see on do product, inventory more well, that have our it it's lip. in building presence

we there. Soulcare, continue then feel in about Keys awareness feel as great focusing really had efforts innovation on well after terms our year good we great increase to of of strategy, continue We couldn't the on Keys Soulcare more to a our And about as So two-pronged that brand about and build response conquesting these and progress about that build Soulcare. categories and some year few you awareness franchises to saw these other bigger pretty additional on making big we could do hearing and with are innovation last tremendous to future Naturium. be what certainly and we on in as it's distribution months, points the like Keys Natorium in be skin, excited will

net really site. was distribution a Amazon million net their own Naturium close of footprint, or sales Target, to limited pretty $XX reminder, primarily a and did million a actually $XX sales As of

its distribution points. in well to new future, as that So presence increase in can we distribution it take the as we feel

as in as we So multiple skin vectors the care of these space being well some have, able to categories. other both address of white

Truist with comes Chappell Securities. question Bill next from Our

there's reinvest I just is repeat. as there? now theme going U.S. and especially opportunities international Naturium, reinvest mean up we're accelerate on so the the back that core than to this quarter, you some opportunity and the continuing there? marketing primarily -- U.S. accelerate much looking rents is recurring I the gross And in of further kind U.K. get kind in of have sales to are back you accelerate it's Or and would we -- it of are and margin a even step business? of more still you Or maybe beat

satisfaction, see opportunity both talked great We've the highest not marketing in continued competitive areas. We're but We brand set. we is up to in obviously satisfaction jumping scores in reinvest we way results, awareness, know our only to about, Bill, in in the that the seeing all So XX% core U.S. as our business the working.

in a much to base, We talked the drove addition in us as are we some to our part in add you'll to pursue investing We're international equity awareness terms vectors. and growth key in about bigger the awareness care digital. our bigger and color and well. so have see skin able But cosmetics also marketing growth the behind is well of percentage in investment we a how of international, we XXX% continue And in U.S. U.K. our Canada as of efforts in as because

As other well in as expanding countries.

they've Just us for probably a a [indiscernible] launch the response see brand, Italy Italy. ago, from seen we was told Douglas in tremendous best entered ever couple of weeks with it and consumers. we

well focus us gives both within that these on money talked have money of expand enough our of that as think as areas. continue into I the we've So some core new range to to pursue we

Grom Peter from comes question next UBS. Our with

really kind loan called line of of opportunity can years think international you for at Are that those you several specifically, out currently out term. of I looking you quarter just near maybe time it about other is you're you know growth share strong markets additional But that, X%, the took X% you there and X kind kind into Italy. about the in And markets. Italy, as get your initial to can in the expansion markets. share? then in So in of the maybe the markets around you and talk anything core the

So any yes, the international helpful. be just strategy on color would

expanded first So the the where real the countries Canadian XXx strength growth Peter, seeing rate U.K., our mentioned we Canada is but call, primarily on And is. and we're international, in. in in category X we business the

where category is. rate Our Xx U.K. the is business growth up

and that see in markets. we X first potential over so X really a So the is top of of primary to a on, tremendous those we're both area be, time, growth from brand coming far focused those markets

be take addition, response we do in followed to rollout there. excited super able the to and other the We're brand to about hear of going markets. I quarters. additional that XX as same disciplined about able us will We a with the as particular U.S. Italy both you countries we're and be retailer own In from into to about leading us at strategy think of hear in what you're all really website country like this penetrate well the see following there. to of our in don't the going countries coming once. you'll ever kind grow to that in a approach going talk

the potential about of you'll in the about Canada both ton and in see markets additional hear a I coming So quarters. growth U.K., and Italy excited

next with question Our comes from Canaccord Anderson Genuity. Susan

take it then at structure Naturium, business? introduction Nice just curious job apply in product I a similar quarter some can just think on maybe SKIN guess, new and I'm guess is to U.S. And just the was market. the learnings about you you versus you're the follow-up and international to if the growth? where on again. there talk margin e.l.f. you I -- there's to U.S.? also drive Can the maybe I on in

for the thanks question. Susan,

pretty X right? those So see those internationally do ship international a say the margin key same from U.S. the margins are into tariffed not difference tariff, we is would the as the of tariffs. As our products standpoint, they directly, markets its U.S., in product we similar ship level I

markets to would And that overall. advantage so international the be X

then they team an X acquisition but the and that us with have led real only was care rate expertise. tremendous growth saw team, potentially that to on Naturium the of skin not entire the And things Natorium,

So we definitely we're feel Naturium be things going applied to can from to versa. vice skin and learn that

efforts, was complementary real think SKIN. in that acquisition I the in e.l.f. being turn, SKIN capabilities so of distribution they expertise as And their will is it's engagement to to see definitely e.l.f. and Naturium the And their where has in benefit tremendous well. Naturium our relevance to education, model, we from benefits have of highly able up ramp then which marketing X think we both formulation

that a it's So marriage perfect way.

Korinne with from Wolfmeyer comes Sandler. question Piper next Our

next not we to touched distribution profile quarter. adding the couple to SAP -- in to more as head pressure a the a about next of bit in touch little the investments there? impact a really know and and briefly on I you're like the the margin the those touched back going should we beyond guiding awesome bit you on be capacity, half but of how Congrats little fiscal the but with year, to thinking I'd quarters spend remarks investments about some it's on add prepared

Thanks for the question.

SAP that is and capacity, terms our So into baked overall. our distribution guidance already of in all the of

our our so And how EBITDA, are adjusted and into about kind our raised as those already think guidance. we top of line we reflected

especially and -- that capacity and we so out those a the distribution SAP lot think throughout. you'll some going of see on be of about that from is capital side as to a standpoint, And build

looking but And there into in through flow whatever out again, we've eventually gotten that's but already so a know just we'll guidance. yet, standpoint, from not 'XX our D&A embedded that in fiscal

And thing continual add I investment this a only is, the been has would story. other

So infrastructure. is of year to where a invested not now We every of stack in years investment. technology make terms areas and in certain have terms X logged single for our huge our this we've

well And the that, you'll both don't bit than that pretty demand investments as meet about it those feel other the see capital. we to as than more so to outsized a seeing. we see continue we're little But other ability as good

Parikh Rupesh comes Oppenheimer. Our from with next question

you on quarter. cadence. QX, if commentary sales from anything or help more QX Also a any a could just congrats us see don't I the I really on know to modeling to if share strong you EBITDA perspective? wanted provide on

Yes.

indicate the as prepared So back QX base. anywhere in higher the Nielsen I start XX% that towards could be between remarks, and we the in for compares end of at be could XX% of lower cycle QX our did the end that higher to be could that and half

quarterly we guidance. you give don't know, As

quarter now raise we're balanced end. of the our XX% to very well really just But time. going guidance that is kind color that's on with and So take pleased our worked to to giving at for we're overall that us. approach quite And for X a And the it the has top be second half.

question from Our comes next Anderson William Jon Blair. with

a quick have I question. quarter. the X-part on Congratulations

of the more in price that vehicles there kind pretty kind of of year been level? kind consistent place 'XX. price contributor on of Do you fiscal XXs of a for or full consideration the in of at to And big sales will Is that outlook through marketing XX% a about to a increases? second kind mix think big has or well? think the a First trying implies, bit half spending rate, is already you in so the type XX% Is and as on or that what kind pricing, And it be so. XX% that then And half pricing little spent? be running second it's another business a the that on about digital. same The a of element? continues game I Just for there first for sense plans how you the can to you'd be Do fiscal it whether talk level company. the in 'XX. And It's guess, I mix at of whether list question that? you record get is room driving much high have of continue? of would the about how have is

Jon. right. All Right.

standpoint, how from increases on little history. pricing. give in just our We've we've a of pricing you price really taken to bit only So approached a history I'd

X The response inflationary XXXX And tariffs. the first response was in last in the XXXX in to in to environment. was

price, what innovation that's the speaks the we've And introduced really driven that mix. price remainder and seeing to XX when standpoint, you're that by more So recently. I largely volume from about largely, talk points driven by

like items our Power Cordless our Primer Glow our and with have $XX Halo ranging very from consumers. [indiscernible] but and to our still $XX We Group resonating Primer much

so the did any And that side, is that we 'XX. pricing mix really pricing More in so take fiscal here in on the actually piece. U.S. what's influencing not

you're that so the mix increase driving is really what's that seeing. that And

of awareness the efforts. a about going what Jon, worked, combination particularly And great we these digital our the of collaborations, broader marketing in. on It's our to front, have quarter going we X time. have this of feel money pillows, did something think that game-changing sold to Many product we last got that invest in right with to Coolidge we're the We're impressions billion on XX dirty the out like get on Jennifer I just more holiday away. advertising,

some good So in and care we're new to of about that continue to talked feel of where money terms that, put Naturium, areas skin awareness, and you're in we going to international. up including continue about to the see going against I ramp

So that and good of we exceptionally strong to places see plenty to have money put continue ROIs.

just Sorry, circle back.

on said did small in internationally Sorry, actually as U.S., just that on I kicking October. take 'XX to a that the was in piece we fiscal not the did off want back well X international I pricing circle the here is we take piece. but there in here

align prices between just And pricing U.S. is to internationally really that the and International.

just 'XX. We pricing price take increase. in early last pricing international international have had we taken when We take last given not and year early here down the

harmonize So it's pricing really to our just globally. structure

comes with Chen Oliver question next PB Our from Callen.

results. great really had Congrats. You've

to how think thinking get what it you it think strat you to Hero are as will side, bigger scope cosmetic you you product share? for in What and skin how do market contrasting opportunities out are you what plans? on opportunity different products and or the as the with big about to your and take your Second, What's care, On about the a seems #X a has channel Third really different It earlier been development. international past kinds it. in as with like that cosmetics done not, in and or given category working. efficacy approaching finally, now you've be that you're about and well, of dynamics? it's

too. on that, thoughts some love would Just

to channel position, to to close a the [ here, over gains space of there, almost #X market of XX I we done we're X or of if retailers. given it's and it share much mentioned take replicating a points space It's One, years Yes. than X #X [indiscernible] and And last see been do any to target few #X of that maybe we're point, Oliver, I the retailers think of market mean, about get XXX a X that or ] has process been their X other we they we're business, different in in have basically question, ahead within some will terms in in to basis that able dedicated disruption we've level of those look what in have what e.l.f. in you other in share? your the And spots at target. that things. combination store. at first we at our more replicating ELF stores. Target really

is a recently progress did is within Beauty in before see expanded huge they top out their already that in the with confidence of that even same rolling And X and way we the I the we've a Walmart multifunctional then look I we're years of have the cosmetics from a brand. those most If they made we partner well. take really, there overall that just point. a And lot in remains still as Ulta then do opportunity, at -- brands. marketing And the a was space third things other retailers. few drug progress And can drug, fall.

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is figuring more you could how encouraging you I to think So within even top coming customer and double really there. even it's your than when sign

of deal share. terms So market a bullishness great of in our

And able parallels Hydration hero at then that there of a some have consistently we've build do we real skin seeing that If I think same I And in the our saw color. with at franchises. to after look I terms look [indiscernible] our we franchise. we're franchise care, of skin year e.l.f. care, take been some year. what a do take

recent to is incredible Our off touchables an start. and most franchise

real first we're items X seeing franchise, in. The resonance in just that

to continue in the have pipeline we is e.l.f. rich. out innovation map both So well Naturium SKIN as that the really quite of as we'll

So I we feel there. great have about the products

approach both international, is, and of the able in those different real U.K. finally, terms we then Canada to the past points in I'd that say from And were of what's terms talked consistent have and we that both penetrate about proof markets how with I retailers. in leading

building team. In very international out addition, strong a we're

up opened in U.K. So entity we the

think I it last year. was

really We authority expansion. team over there focused have XX that's a on people our international

As I mentioned, Italy being there. examples X of most recent best the

continue with and Naturium relative in Soulcare. internationally, in pipeline all great share care skin our then And have white on Obviously, our SKIN, brands, fronts to peers. of market X ability terms space our So just there global of build and we the really Keys e.l.f. tons to all of to color. X feel

with Our from Astrachan Stifel. next comes question Mark

thoughts to think And scanner a that? makeup that do I'm from then you go influences products everyone. about typical that beauty you afternoon, data where today? to cosmetics good that of above you is the remind and the growth. time, can just What over can secondly, and category set sector in placed please SKIN or us other you driving that? as slowdown a that bit Where overall a product be put what's think specific move make with going showing the Thanks, And grows difference forward? that do meaning e.l.f. skin little seems away Curious, of does do as care you

that's say definitely some time Mark, color skin cosmetics and saw. the overall, have care bullish So I'd been I'm quite for and on And category. you what

a pandemic. after saw great resurgence You the

in very terms You're of in I we're periods. seeing out good good category. investment. data of terms resonance Overall, going that, innovation, have different to wanting express in mean activity consumer to the by themselves, levels and around some of there get And scanner strong bouncing good

And to through. quite on this? take want category go the am forward then we actually I as you going So bullish do

e.l.f. example, on Mark, in earlier, at in by color spoke actually I today. really then as skincare are we're we're retailer And housed as Target we Yes. And cosmetics set. where Ulta, an the to with SKIN, depends line

potentially to we we to see to set. aas sales to those could those an each and eventually, from sets But is -- most drive of of learn so And both see in retailers. skincare see the going continue on what the its own opportunity test most in

care a They we have in things Naturium, skin actually. skin are the of care about phenomenal set and within One job. the really loved done

learn lot well. a that brand can as of things So that we from

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

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

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

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