E.l.f. Beauty lowers outlook despite double-digit growth

E.l.f. Beauty has delivered a 31% increase in sales for the third quarter ending 31 December 2024 but has lowered its outlook after "softer than expected trends in January".

Net sales reached $355.3 million (£286 million) during the three months, driven by strength in both retailer and e-commerce channels, in the US and internationally.

Gross margin increased to 71%, primarily driven by favourable foreign exchange impacts on goods purchased from China, cost savings, and inventory adjustments, partially offset by mix and higher transportation costs.

For the nine months ending 31 December 2024, net sales increased 40% to $980.9 million (£790 million), with gross margin up approximately 50 basis points to 71%.

Tarang Amin, Chairman and CEO at E.l.f. Beauty, said: "I’m proud of the team for delivering another quarter of consistent, category-leading growth.

"We believe we're still in the early innings of unlocking the whitespace we see across digital, colour cosmetics, skincare and international."

Despite the double-digit growth in the golden quarter, E.l.f. Beauty expects sales to rise between 27-28% for FY25, compared to 28-30% expected previously.

Mandy Fields, CFO at E.l.f. Beauty, said: "Given softer than expected trends in January, we are taking a prudent approach and lowering our outlook for the final quarter of our fiscal year."

It will still reflect growth, following E.l.f. Beauty's "strongest year" with sales up 77% in the 12 months ending 31 March 2024.