e.l.f. Beauty, Inc. (NYSE:ELF) Q1 2024 Earnings Conference Call August 1, 2023 4:30 PM ET

Company Participants

KC Katten – Vice President-Corporate Development and Investor Relations

Tarang Amin – Chairman and Chief Executive Officer

Mandy Fields – Senior Vice President and Chief Financial Officer

Conference Call Participants

Dara Mohsenian – Morgan Stanley

Olivia Tong – Raymond James

Linda Bolton Weiser – D.A. Davidson

Andrea Teixeira – JPMorgan

Susan Anderson – Canaccord Genuity

Bill Chappell – Truist Securities

Anna Lizzul – Bank of America

Korinne Wolfmeyer – Piper Sandler

Ashley Helgans – Jefferies

Mark Astrachan – Stifel

Jon Andersen – William Blair

Erica Eiler – Oppenheimer

Joanna Rucker – TD Cowen

KC Katten

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. Since many of our remarks today contain forward-looking statements, please refer to our earnings release and reports filed with the SEC, where you will find factors that could cause actual results to differ materially from these forward-looking statements.

In addition, the company’s presentation today includes information presented on a non-GAAP basis. Our earnings release contains reconciliations of the differences between the non-GAAP presentation and the most directly comparable GAAP measure.

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

Tarang Amin

Thank you, KC, and good afternoon, everyone. Today, we will discuss the drivers of our Q1 results and our raised outlook for fiscal 2024. I want to start by recognizing the e.l.f. Beauty team. We’re off to an incredibly strong start this fiscal year, delivering Q1 results well ahead of expectations.

Q1 marked our 18th consecutive quarter of net sales growth, putting e.l.f. Beauty in a select group of consistent, high-growth consumer companies. We are one of only five public consumer companies out of 274 total that has grown for 18 straight quarters and averaged at least 20% sales growth per quarter. In Q1, we grew net sales by 76%, increased gross margin by 280 basis points and delivered $74 million in adjusted EBITDA, up 135%.

Last quarter, we spoke about the three areas with significant runway for growth in color cosmetics, skincare and internationally. Let me update you on our progress in Q1. In color cosmetics, we continue to outperform category trends. In Q1, e.l.f. grew 48% in tracked channels, well above category growth of 6%. We increased our market share by 260 basis points. Out of nearly 800 cosmetics brands tracked by Nielsen, e.l.f. is the only brand to gain share for 18 consecutive quarters. As great as the share growth has been, we see an opportunity to double our market share over the next few years. Nationally, e.l.f. is the number three brand today with approximately 9.5% share.