Elf Beauty Inc (NYSE:ELF) shares fluttered 12% pre-market on Thursday after the cosmetics company outstripped market forecasts with second-quarter results and an improved outlook.
Net sales increased 40% to $301.1 million, with growth from physical retail and e-commerce channels in the US and internationally.
Gross margin increased 40 basis points to 71% on the back of cost savings, favorable currency swings and price increases, but earnings fell due to higher costs.
Net income came in at $19 million, or 33 cents a share, down from $33 million, or 58 cents a share, a year ago. SGA expenses increased $74.0 million to $186.1 million, or due to an increase in marketing and digital spend, compensation and benefits, operations costs, retail fixturing and visual merchandising costs, depreciation and amortization, and professional fees.
Adjusted EPS of $0.77, however, beat the consensus forecast of $0.43, per FactSet.
Chairman and CEO Tarang Amin said it was "another quarter of consistent, category-leading growth", with market share growing by 1.95% in the US.
"We continue to make progress across color cosmetics, skin care and international and believe our unique areas of advantage will fuel our ability to win in fiscal 2025 and beyond," Amin said.
Having disappointed Wall Street with guidance at the time of its fiscal first quarter results, Elf impressed this time as it guided for sales of $1.315-1.335 billion for the year to March 2025, up from the previous guidance $1.28-1.30 billion, with EPS now guided to $3.47-3.53, up from $3.36-3.41.