CALIFORNIA, United States — Elf Beauty Inc. shares rose after the bell on Wednesday as the company raised its fiscal 2020 forecasts for profit and revenue after beating Wall Street estimates on those metrics in the second quarter. This was the second forecast boost for Elf.
Net sales for the year will be $265 million to $272 million, the Oakland, California-based cosmetics company said in a statement. That’s up from the company’s forecast in August of $246 million to $256 million. Analysts projected sales of $259.9 million, according to the average of estimates compiled by Bloomberg.
“We raised guidance this quarter to reflect the momentum we’re seeing in top-line sales, balanced by a soft colour cosmetics category, cycling larger holiday and pipeline volume in our fiscal 2019 base and ongoing evaluation of the long term impact of pricing,” Chief Financial Officer Mandy Fields said.
Wall Street analysts had been optimistic ahead of the earnings report, citing positive indicators from third-party data firms. Elf shares have more than doubled this year as changes such as an enhanced loyalty programme and a new digital marketing campaign have paid off with improving sales. The stock rose 9 percent in post-market trading to $19.50, which would be the highest level since June of last year.
“We are really pleased with this quarter’s results,” Chief Executive Tarang Amin told Bloomberg in a phone interview. “We are most pleased with the execution against our initiatives” set forth at the beginning of the year, which include a focus on driving demand in the Elf brand and a “major step-up in digital.”
E-commerce sales continued to accelerate during the second quarter, at both elf.com and on websites of retailer partners, rising by “double-digits” on a year-over-year basis, he noted.
With regard to tariffs, Amin said the company boosted prices on about a third of its product SKUs. Pricing was received well by consumers and these initiatives contributed about 200 basis points to the 11 percent second-quarter sales growth, he said.
By Janet Freund; editors: Catherine Larkin, Jeran Wittenstein and Jennifer Bissell-Linsk