02.03.23
Net sales for Elf Beauty increased 49% to $146.5 million for the three months ended Dec. 31, 2022.
"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, Elf 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."
These results were primarily driven by strength in both retailer and e-commerce channels, the company reported.
Gross margin increased approximately 180 basis points to 67%, primarily driven by price increases, cost savings and product mix, partially offset by inventory adjustments and costs related to space gains and spring shelf resets.
Selling, general and administrative expenses ("SG&A") increased $20.1 million to $75.4 million, or 51% of net sales. Adjusted SG&A (SG&A excluding the items identified in the reconciliation table below) increased $19.6 million to $68.2 million, or 47% of net sales. The increase was primarily due to an increase in marketing and digital spend, compensation and benefits, operations costs, retail fixturing and visual merchandising costs.
The provision for income taxes was $4.3 million. Net income was $19.1 million on a GAAP basis. Adjusted net income (net income excluding the items identified in the reconciliation table below) was $26.8 million. Diluted earnings per share were $0.34 on a GAAP basis. Adjusted diluted earnings per share (diluted earnings per share calculated with adjusted net income excluding the items identified in the reconciliation table below) were $0.48.Adjusted EBITDA (EBITDA excluding the items identified in the reconciliation table below) was $36.6 million, or 25% of net sales, up 69% year over year.
Net Sales for Nine Months Ended December 31, 2022
For the nine months ended December 31, 2022, compared to the nine months ended December 31, 2021, Elf reported net sales increased 36% to $391.5 million, primarily driven by strength in both our retailer and e-commerce channels. Gross margin increased approximately 255 basis points to 67%, primarily driven by price increases, cost savings, and product mix, partially offset by inventory adjustments and higher transportation costs.
SG&A increased $44.6 million to $201.2 million, or 51% of net sales. Adjusted SG&A increased $40.0 million to $179.4 million, or 46% of net sales. The increase was primarily due to an increase in marketing and digital spend, compensation and benefits, operations costs, retail fixturing and visual merchandising costs. The provision for income taxes was $10.5 million. Net income was $45.3 million on a GAAP basis. Adjusted net income was $68.0 million. Diluted earnings per share were $0.82 on a GAAP basis. Adjusted diluted earnings per share were $1.24. Adjusted EBITDA was $95.5 million, or 24% of net sales, up 54% year over year.