On Wednesday, E.l.f. Beauty announced its fourth-quarter and year-end earnings for 2023, reporting a 48% year-over-year growth in net sales for the fiscal year.
Total net sales were $578.8 million, primarily driven by strength across the company’s retailer and e-commerce channels, according to the company’s press release. The press release did not break down sales between E.l.f. Beauty brands, which include E.l.f. Cosmetics, E.l.f. Skin, Keys Soulcare and W3ll People. E.l.f. Beauty’s forecast for fiscal 2024 is a 22-24% increase in net sales. Tarang Amin, CEO of E.l.f. Beauty, said there are five strategic focuses contributing to the company’s success. They include building brand demand, powering a digital presence, growing internationally, deepening partnerships with retailers and delivering profitable growth.
Contributing to brand demand, Tarang called out key moments from the fiscal year. They included E.l.f’s commercial with actress Jennifer Coolidge during the Super Bowl, a branded Twitch channel and a collaboration with American Eagle. The Super Bowl commercial which spotlighted the brand’s Power Grip Primer, received 57 billion impressions and drove a 64% increase in purchase consideration, plus it led to an undisclosed boost in Power Grip sales.
E.l.f. Beauty’s net sales increased 78% to $187.4 million in the fourth quarter, primarily driven by strength across its retailer and e-commerce channels. Meanwhile, its selling, general and administrative expenses increased $55.7 million to $121.1 million, or 65% of net sales. That was primarily due to increases in marketing and digital spending, operations costs, and compensation and benefits.
In fiscal year 2023, E.l.f.’s digital sales consumption increased 75% year-over-year. Digital channels drove 17% of total brand sales, compared to 14% the year prior. And the brand’s Beauty Squad loyalty program currently reached 3.7 million members, a growth of 25% year-over-year. Members drove nearly 80% of sales on ElfCosmetics.com.
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“Founded as a digitally native brand, E.l.f Cosmetics remains the only top five mass cosmetics brand as a direct-to-consumer site,” said Amin. “We see an opportunity to increase our digital penetration, particularly as we further enhance our Beauty Squad loyalty program.”
Wholesale retail has continued to play an important role in E.l.f’s growth, as well. E.l.f. Beauty’s two largest retail partners are Target and Walmart, and the brand increased sales “productivity” on a sales per linear foot basis during the fiscal year. Meanwhile, its sales at Ulta Beauty grew by 70% year-over-year, without additional shelf space. E.l.f. currently has 12 feet of shelf space at Target, eight feet in Ulta Beauty and seven feet in Walmart. The brand will expand its shelf presence at Ulta Beauty, CVS and Walgreens in the fall.
“Our strategy of using our new products and marketing engine to shine a light on our existing products within the franchise has proven successful and fueled growth year after year,” said Amin.
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Amin did not call out portfolio brands Keys Soulcare or W3ll People. However, skin care experienced a 12% increase year-over-year in the fourth quarter.
