By Anuja Bharat Mistry
(Reuters) -Elf Beauty on Wednesday raised its forecast for annual revenue and profit, betting on its efforts to sell cosmetics such as lip oil and liquid blush at affordable prices in the U.S. and abroad, sending the company’s shares into increased by 9% in the extended period. trade.
Customers looking for cheaper makeup and skincare products have helped boost Elf’s sales in a challenging market where major beauty brands like Estee Lauder and L’Oréal are struggling to increase demand.
Elf expects net sales between $1.32 billion and $1.34 billion, compared to its previous forecast of $1.28 billion to $1.30 billion.
The company’s strategy of introducing “dupes” of luxury cosmetics and pricing its products between $2 and $10 has further increased demand.
The California-based company has expanded its product offering to big-box retailers such as Walmart, Target and Amazon.com, allowing it to reach a broader customer base in the United States.
Elf is expanding to a subset of Dollar General stores in November, CEO Tarang Amin said on a post-earnings call, adding that it helps tap into a consumer base that only has access to some older mass-market brands.
Net sales rose 40% to $301.1 million for the quarter ended September 30, compared with average analyst estimates of $285.8 million, according to data compiled by LSEG.
On an adjusted basis, the company posted earnings of 77 cents per share, beating analyst expectations of 43 cents per share.
It expects adjusted annual earnings per share between $3.47 and $3.53, compared to the previous range of $3.36 to $3.41.
Price increases in international markets such as India and Germany and cost-cutting measures helped Elf grow gross margin by 40 basis points to 71% in the second quarter.
Elf has broad appeal among all income groups, Amin told Reuters, adding that the company’s “strategy is to provide the highest quality at an accessible price or at an extraordinary price.”
(Reporting by Anuja Bharat Mistry in Bengaluru; Editing by Shailesh Kuber)
