On November 1, 2023, e.l.f. Beauty Inc (ELF, Financial) announced its second quarter fiscal 2024 results, showcasing significant growth in net sales and gross margin. The company also highlighted its recent acquisition of Naturium, a fast-growing skincare brand.
Financial Performance
For the three months ended September 30, 2023, e.l.f. Beauty Inc (ELF, Financial) reported a 76% increase in net sales to $215.5 million, primarily driven by strength in both retailer and e-commerce channels. The gross margin increased by approximately 570 basis points to 71%, primarily due to lower inventory adjustments, cost savings, improved transportation costs, and favorable foreign exchange impacts. However, these were partially offset by costs associated with retailer activity and space expansion.
The company's net income was $33.3 million on a GAAP basis, with diluted earnings per share at $0.58. Adjusted net income was $47.1 million, and adjusted diluted earnings per share were $0.82. Adjusted EBITDA was $60.4 million, or 28% of net sales, marking a 122% increase year over year.
Naturium Acquisition
On October 4, 2023, e.l.f. Beauty Inc (ELF, Financial) closed the acquisition of Naturium, a fast-growing, high-performance skincare brand, for $355 million in a combination of cash and company stock. The company expects Naturium to contribute approximately $48 million in net sales, approximately $9 million in adjusted EBITDA, and approximately $0.04 in adjusted EPS on a fully diluted basis in fiscal 2024.
Updated Fiscal 2024 Outlook
The company updated its outlook for fiscal 2024, reflecting an expected 55-57% year-over-year increase in net sales, compared to a previously expected 37-39% increase. The updated outlook now includes the addition of Naturium.
Balance Sheet
As of September 30, 2023, e.l.f. Beauty Inc (ELF, Financial) had $167.8 million in cash and cash equivalents and $57.7 million of long-term debt and finance lease obligations. This compares to $85.3 million in cash and cash equivalents and $88.3 million of long-term debt and finance lease obligations as of September 30, 2022.
Conclusion
e.l.f. Beauty Inc (ELF, Financial) continues to demonstrate strong financial performance with consistent growth in net sales and gross margin. The acquisition of Naturium is expected to further enhance the company's product portfolio and contribute to its financial growth in fiscal 2024.
Explore the complete 8-K earnings release (here) from e.l.f. Beauty Inc for further details.
