e.l.f. Beauty's Q3 fiscal 2023 net sales increased 49% year-over-year to $146.5 million, while nine month sales increased 36% to $391.5 million. The strong results follow revelations from Ulta Beauty that e.l.f. has been a strong makeup sales performer for the retailer.
The NPD Group’s recent "Makeup Attitudes and Usage Report" found that women are gradually returning to their previous makeup routines now that most mask requirements have been lifted and more people have been getting back to their pre-pandemic activities.
About 70% of U.S. makeup users have reverted to their previous makeup regimens or are wearing more makeup than they did prior to the pandemic lockdown.
"As women get dressed up again, makeup is a natural accompaniment," said Larissa Jensen, beauty industry adviser at The NPD Group, in a research note. "The recovery and creativity of the makeup category are leading sales gains for the prestige beauty industry in 2022. After a gloomy period shrouded by the pandemic, we are seeing a renaissance in makeup artistry, as consumers experiment with color again."
In response to recent growth, e.l.f. Beauty has raised its full-year net sales forecast from the $478-486 million range to the $541-545 million range. The updated range reflects a 38-39% year-over-year increase in net sales.
- Q3 gross margin increased approximately 180 basis points to 67%, while nine-month gross margin increased about 255 basis points to 67%.
- Q3 net income was $19.1 million on a GAAP basis, while adjusted net income was $26.8 million. Nine-month net income was $45.3 million on a GAAP basis, while adjusted net income was $68.0 million.
- Q3 2022 adjusted EBITDA was $36.6 million, or 25% of net sales, up 69% year over year.
As of December 31, 2022, e.l.f. Beauty had $87.0 million in cash and cash equivalents and $62.2 million in long-term debt and finance lease obligations, as compared to $32.9 million in cash and cash equivalents and $92.5 million of long-term debt and finance lease obligations as of December 31, 2021.
"We delivered a terrific third quarter—growing our net sales by 49% and expanding our market share by 150 basis points, according to Nielsen,” said Tarang Amin, e.l.f. Beauty's chairman and CEO. “This quarter marked our 16th consecutive quarter of net sales growth, reflecting the continued strong execution by the e.l.f. Beauty team. As we look ahead, we're excited about the potential we see as we continue to make the best of beauty accessible to every eye, lip, face and skin concern."
