E.l.f. Beauty to Raise Prices, Go Fully Clean – WWD
E.l.f. Beauty has posted its 12th consecutive quarter of sales growth, and is raising its guidance.
The company now says it is expecting between $372 million and $379 million in net sales for fiscal 2022, up from $364 million to $370 million previously forecast.
E.l.f.’s sales grew despite a major shift during the fourth quarter — the cancelation of the company’s annual holiday program, which generally brings in about $12 million at retail, said chief executive officer Tarang Amin.
“What we saw was consumers really migrated to our core items, so our consumption was much stronger than I was expecting,” Amin said. “I was actually expecting a pretty big hit.”
For the quarter ended Dec. 31, E.l.f.’s sales increased 11 percent to $98.1 million, with net income of $6.2 million.
For the nine months ended Dec. 31, sales increased 27 percent, to $287 million, with net income of $20.2 million.
Amin said the company plans to raise prices on about two-thirds of its products in March, due to shipping cost increases. Prices for entry-level products, generally $2 or $3, will not change, he said.
Going forward, all E.l.f. products will meet European Union Cosmetics Regulation ingredient standards, the company has said. The initiative required the reformulation of about 350 products, and there are now about 1,600 ingredients that E.l.f. will not use.
Amin said E.l.f.’s move toward clean was inspired by W3ll People, a brand it acquired a few years ago that was an early-mover in plant-based ingredients.
“As we take a look, particularly our Gen Z consumers increasingly are more and more concerned about what are the ingredients in their products, and really care about that,” Amin said.
E.l.f. has new sustainability plans, too, called “Project Green Unicorn,” where it will look to further sustainability efforts, Amin said. “We want to continue to drive strong productivity on shelf, but we’re going to do it in a way that reduces package waste, adopts friendlier environmental processes, and eventually takes a look at more sustainable packaging, as well,” Amin said.
Going forward, E.l.f. expects to experiment more with new technologies, including NFTs — which it calls “N Elf Ts,” Amin said — as well as the metaverse.
Last week the company launched a partnership on TikTok to look for makeup artists who could potentially work with The Future X, the music group created by “American Idol” creator Simon Fuller on TikTok. “We’re already over 7 billion views,” Amin said.
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