Sales at Ulta, Shelf Space Gains Drive E.l.f. Sales
E.l.f. expects to finish its Ulta rollout in the second quarter.
E.l.f. Beauty’s gains in the first quarter were driven largely by growth at retail.
The beauty brand posted a 9 percent uptick in sales for the first quarter, to $65.9 million. Net income was $700,000, down from $2.2 million in the prior-year period.
E.l.f.’s sales uptick was driven by shelf space gains the company made in 2017 and added distribution at Ulta Beauty.
“The rollout has gone really well, we’re off to a strong start,” said E.l.f. chief executive officer Tarang Amin. “Initial numbers look good to us.” E.l.f.’s rollout at Ulta is nearly complete, Amin said.
Amin also noted that the company’s international business — through Walmart in Canada and Mexico and Superdrug in the U.K. — is doing well. “The brand really does resonate in these markets,” Amin said.
At Target, E.l.f.’s Beauty Shield line is a bestseller, particularly its Magnetic Mask, Amin noted. E.l.f. also highlighted its Heart Defense highlighter, which sold out of stores in two weeks, to analysts.
E.l.f. launched 31 new products in the first quarter, including 12 that were first to mass. The company launched more skincare products that focus on oil control or refining, but chief financial officer John Bailey clarified on the call that makeup would probably remain dominant in the business for a while. The brand’s Beauty Squad Loyalty Program now has more than 900,000 members.
The business reaffirmed its outlook for 2018. E.l.f. is projecting sales to rise between 6 and 8 percent, to $286 to $291 million, with adjusted earnings before interest, taxes, depreciation and amortization of $64 million to $66.5 million, also a 6 to 8 percent increase.
Asked by a Wall Street analyst, Bailey clarified the company’s stance on M&A activity, calling E.l.f.’s position “fairly unchanged” and adding that any potential deals would be “about finding the right strategic assets that would be the right complement for us.”