Fairy beauty on Wednesday raised its full-year forecast after the corporate reported 40% revenue growth.
The company's shares rose nearly 10% in after-hours trading.
The cosmetics retailer's earnings significantly exceeded expectations in each sales and profits, and the corporate now expects sales of between $1.32 billion and $1.34 billion in fiscal 2025, above the $1.30 billion expected by analysts, in response to LSEG. Dollar lies.
Here's how Elf performed within the fiscal second quarter in comparison with Wall Street's expectations, based on an LSEG analyst survey:
- Earnings per share: 77 cents adjusted versus 43 cents expected
- Revenue: $301 million versus expected $286 million
The company's reported net income for the three-month period ended Sept. 30 was $19 million, or 33 cents per share, compared with $33 million, or 58 cents per share, a 12 months earlier. Excluding one-time items, Elf earned $45 million, or 77 cents per share.
Revenue rose to $301 million, up about 40% from $216 million a 12 months ago.
Elf raised its full-year revenue forecast to $1.3 billion from $1.28 billion previously and likewise raised its adjusted profit forecast. The retailer expects adjusted earnings to be between $3.47 and $3.53 per share, down from previously forecast between $3.36 and $3.41 per share. According to LSEG, analysts had expected a profit forecast of $3.51.
The cosmetics company has been an enormous success in recent times due to its viral marketing and skill to win over young shoppers with its inexpensive versions of its prestige favorites.
“We see cross-generational appeal at Elf. Not only are we the No. 1 brand among Generation Z by a wide margin, but we are also the best-selling brand among Generation Alpha and Millennials,” said CEO Tarang Amin in an interview with CNBC. “We are attracting consumers of virtually every age and income cohort, which is great to see and I think is a testament to the strength of our strategy and the quality of our products.”
Amin said that success led each of them Goal And Walgreens plan to expand the shelf space they make available to the retailer starting within the spring.
During the quarter, Elf's selling, general and administrative expenses increased by $74 million to $186.1 million, or 62% of net sales, yet the corporate still managed to realize a gross margin of 71%, which corresponds to a rise of 0.4 percentage points in comparison with the identical quarter of the previous 12 months.
Amin attributed the margin increase to favorable exchange rates, previously implemented international price increases and its overall value proposition.
“Our ability to develop prestige quality at these exceptional prices has been the real driver, but most of our margin growth over the years has come from our innovation mix,” Amin said. “As we introduce a new one of our holy grails, we have the opportunity to increase our margin a little while providing incredible value.”
The company has also expanded its international sales, which now account for about 21% of total sales.
Amin said his exposure to markets outside the U.S. will help soften the blow of any tariff increases that would come under President-elect Donald Trump.
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