E.l.f. Beauty, Inc. · NYSE:ELF
E.l.f. Beauty — Q4 2024 Earnings Presentation
112 slides from E.l.f. Beauty's earnings presentation, May 22, 2024
Slide 1: Q4 FY 2024 Earnings Webcast
Q4 FY 2024 EARNINGS WEBCAST
Slide 2: Forward-looking statements and non-GAAP notice
As a reminder, this call contains forward-looking statements that are based on management’s expectations – including those relating to the category trends and longer- term outlook – and are subject to known and unknown risks and uncertainties, and therefore, actual results may differ materially. Imp
Slide 3: Tarang Amin, Chairman & Chief Executive Officer
TARANG AMIN CHAIRMAN & CHIEF EXECUTIVE OFFICER
Slide 4: Agenda
AGENDA 1 2 Q4 & FY 2024 FY 2025 RESULTS OUTLOOK
Slide 5: FY 2024 Results
FY 2024 RESULTS + 77 % + 330 +101% +305 BPS BPS NET SALES GROSS MARGIN ADJUSTED EBITDA MARKET SHARE FY 2024 YEAR-OVER-YEAR, AS COMPARED TO FY 2023. $ MARKET SHARE PER NIELSEN XAOC LATEST 52 WEEKS ENDING 3/23/2024
Slide 6: 21st Consecutive Quarter of Net Sales Growth
21ST CONSECUTIVE QUARTER OF NET SALES GROWTH +85% +78% +76% +76% +71% +50% +49% +33% +27% +26% +24% +16% +13% +11% +10% +11% +7% +8% +8% +7% +3% FY 19 FY 20 FY 21 FY 22 FY 23 FY 24 NET SALES GROWTH BY QUARTER, EXCLUDING E.L.F. STORES (CLOSED IN FEBRUARY 2019)
Slide 7: 1 of 5 out of 274 companies with 21 quarters of >20% growth
1 OF 5 OUT OF 274 21 QUARTERS >20% GROWTH FACTSET, INCLUDES PUBLICLY TRADED COMPANIES IN THE XRT AND XLP INDICES
Slide 8: Q4 FY 2024 Results
Q4 FY 2024 RESULTS + 71 % + 180 + 93 % BPS NET SALES GROSS MAR GIN ADJUSTED EBITDA Q4 FY 2024 YEAR-OVER-YEAR, AS COMPARED TO Q4 FY 2023
Slide 9: Areas with Significant Runway for Growth
A R E A S W I T H S I G N I F I C A N T R U N W AY F O R G R O W T H
Slide 10: Cosmetics Consumption
COSMETICS CONSUMPTION + 30 % –3% COLOR CATEGORY E.L.F. COSMETICS YOY CONSUMPTION GROWTH. NIELSEN XAOC LATEST 12 WEEKS ENDING 3/23/2024, COLOR COSMETICS CATEGORY
Slide 11: Dollar Share Growth
$ SHARE GROWTH +325 -65 -85 -20 -60 MAYBELLINE L’ OREA L E.L.F. COVERGIRL REVLON NIELSEN XAOC LATEST 12 WEEKS ENDING 3/23/2024, COLOR COSMETICS CATEGORY
Slide 12: Moved up to #2 in dollar share and #1 in unit share
MOVED UP TO THE #2 RANK IN $ SHARE AND #1 RANK IN UNIT SHARE #1 #2 #2 #3 $ SHARE UNIT SHARE NIELSEN XAOC LATEST 12 WEEKS ENDING 3/23/2024, COLOR COSMETICS CATEGORY
Slide 13: Areas with Significant Runway for Growth
A R E A S W I T H S I G N I F I C A N T R U N W AY F O R G R O W T H
Slide 14: Skin Care Consumption
SKIN CARE CONSUMPTION + 38 % 19 X +2% SKIN CARE CATEGORY E.L.F. SKIN YOY CONSUMPTION GROWTH. NIELSEN XAOC LATEST 12 WEEKS ENDING 3/23/2024, FACIAL SKIN CARE CATEGORY
Slide 15: e.l.f. Skin Share Gain and Brand Rank
E . L . F. S K I N + 45 # 11 BPS SHARE GAIN BRAND RANK NIELSEN XAOC LATEST 12 WEEKS ENDING 3/23/2024, FACIAL SKIN CARE CATEGORY
Slide 16: Clinically Effective, Biocompatible Skin Care
CLINICALLY EFFECTIVE, BIOCOMPATIBLE SKIN CARE
Slide 17: Naturium Net Sales Growth Contribution
+17 PP NET SALES GROWTH CONTRIBUTION Q4 NET SALES GROWTH CONTRIBUTION FROM NATURIUM
Slide 18: Areas with Significant Runway for Growth
A R E A S W I T H S I G N I F I C A N T R U N W AY F O R G R O W T H
Slide 19: International Net Sales Growth
115% INTERNATIONAL NET SALES GROWTH Q4 FY 2024 YEAR-OVER YEAR INTERNATIONAL NET SALES GROWTH
Slide 20: Rank #3 in Canada and #4 in the UK
NOW RANK #3 IN CANADA AND #4 IN THE UK IN $ SHARE #3 #4 #6 #7 CANADA UK $ SHARE, NIELSEN, UK L12W ENDING 4/6/2024 AND CANADA L12W ENDING 3/23/2024
Slide 21: International Penetration
I N T E R N AT I O N A L P E N E T R AT I O N 13 % 16 % Q4 FY 2023 Q4 FY 2024 % OF NET SALES
Slide 22: Three Key Drivers of Our Results
THREE KEY DRIVERS OF OUR RESULTS VA L U E PROPOSITION DISRUPTIVE POWERHOUSE MARKETING ENGINE I N N O VAT I O N
Slide 23: Value Proposition
VA L U E P R O P O S I T I O N
Slide 24: Our Mission
OUR MISSION WE MAKE THE BEST OF BEAUTY ACCESSIBLE TO EVERY EYE, LIP, FACE AND SKIN CONCERN 24
Slide 25: Unique Ability to Deliver Holy Grails
U N I Q U E A B I L I T Y T O D E L I V E R “ H O LY G R A I L S ” $14 $10 $8 $12 VS $49 VS $38 VS $40 VS $38 PRESTIGE PRESTIGE PRESTIGE PRESTIGE
Slide 26: AUR Comparison
A U R C O M PA R I S O N > 20 $ ~ 9.50 $ ~ 6.50 $ E.L.F. COSMETICS TOP MASS BRANDS PRESTIGE BRANDS NIELSEN XAOC LATEST 52 WEEKS ENDING 3/23/2024, COLOR COSMETICS CATEGORY. CIRCANA LATEST 52 WEEKS ENDING 12/31/2023
Slide 27: Unit Volume Growth
UNIT VOLUME GROWTH +33% -7% -7% -6% -9% MAYBELLINE L’ OREA L E.L.F. COVERGIRL REVLON YEAR-OVER-YEAR CHANGE IN UNITS, NIELSEN XAOC LATEST 52 WEEKS ENDING 3/23/2024, COLOR COSMETICS CATEGORY
Slide 28: Powerhouse Innovation
P O W E R H O U S E I N N O VAT I O N
Slide 29: 2018: #1 or #2 position in 8 cosmetics segments
2018: #1 OR #2 POSITION IN 8 COSMETICS SEGMENTS #1 #1 #1 #2 #1 #1 #1 #1 SETTING HIGHLIGHT EYELASH COSMETIC PRIMER BRUSHES MULTI-FACE EYE PRIMER SPRAY /CONTOUR CURLER ACCESSORY $ SHARE $ SHARE $ SHARE $ SHARE UNIT SHARE UNIT SHARE $ SHARE UNIT SHARE NIELSEN XAOC LATEST 52 WEEKS ENDING 12/30/2018
Slide 30: 2024: #1 or #2 position in 18 cosmetics segments
2024: #1 OR #2 POSITION IN 18 COSMETICS SEGMENTS #1 #1 #1 #1 #1 #1 #1 #1 #1 SETTING HIGHLIGHT EYELASH PRIMER BRUSHES EYEBROW MULTI-EYE EYE PRIMER LIP GLOSS SPRAY /CONTOUR CURLER $ SHARE $ SHARE UNIT SHARE UNIT SHARE $ SHARE UNIT SHARE $ SHARE $ SHARE $ SHARE #1 #1 #2 #2 #1 #1 #2 #2 #2 COSMETIC EYELA
Slide 31: Building Growing Product Franchises
BUILDING GROWING PRODUCT FRANCHISES
Slide 32: Power Grip Dewy Setting Spray vs. prestige
VS $ 38 PRESTIGE $10 POWER GRIP DEWY SETTING SPRAY
Slide 33: Skin Care: Holy Hydration! Gel-Yeah Moisturizer
SKIN CARE HOLY HYDRATION! GEL-YEAH MOISTURIZER ————————— CY allantoin with plant-based — ¥ squalane + prickly pear . a
Slide 34: e.l.f. Skin Market Dollar Share
E . L . F. S K I N M A R K E T $ S H A R E 1.6 % 3X 0.5 % FY 2019 FY 2024 FACIAL SKIN CARE $ SHARE. NIELSEN XAOC LATEST 52 WEEKS ENDING 3/23/2024
Slide 35: e.l.f. Dollar Share: Color Cosmetics and Skin Care
E . L . F. $ S H A R E 10.5 % 1.6 % COLOR COSMETICS SKIN CARE $ SHARE. NIELSEN XAOC LATEST 52 WEEKS ENDING 3/23/2024
Slide 36: Bronzing Drops vs. prestige
VS $ 38 PRESTIGE $12 BRONZING DROPS
Slide 37: New Bestseller on elfcosmetics.com in Q4
NEW BESTSELLER ELFCOSMETICS.COM IN Q4
Slide 38: Disruptive Marketing Engine
DISRUPTIVE MARKETING ENGINE
Slide 39: e.l.f. Ing Entertaining
E . L . F. I N G E N T E R TA I N I N G
Slide 40: Teen Favorite Cosmetics Brand
#1 TEEN FAVORITE COSMETICS BRAND FOR FIFTH CONSECUTIVE SEASON PIPER SANDLER TAKING STOCK WITH TEENS SURVEY, SPRING 2024
Slide 41: Teen brand rankings
+ 16 PPTS VS. LAST YEAR 01 38 % 02 Rare Beauty 9% 03 Maybelline 6% 04 Charlotte Tilbury 5% 05 Fenty Beauty 4% PIPER SANDLER TAKING STOCK WITH TEENS SURVEY, SPRING 2024
Slide 42: Skincare Brand Among Teens
#8 SKINCARE BRAND AMONG TEENS #8 TEEN FAVORITE SHOPPING DESTINATION PIPER SANDLER TAKING STOCK WITH TEENS SURVEY, SPRING 2024
Slide 43: Most purchased by Millennials and Gen Alpha
#2 #1 MOST PURCHASED MOST PURCHASED MILLENNIALS (30-39) GEN ALPHA (6-11) use Benny drama in one b megan trainor, the young from cosmetic criminals a characters. TRUST “THIS IS 30” SURVEY (APRIL 2024), CIVIC SCIENCE (APRIL 2024)
Slide 44: Marketing campaign example
Death MOUNTAIN Ware! Qaot
Slide 45: Campaign results
12 B+ TRIPLE DIGIT LIFT PRESS IMPRESSIONS IN SITE VISITS 68 % < 45 NEW MINUTES PURCHASERS SOLD OUT
Slide 46: Marketing Investment
MARKETING INVESTMENT 25 % 22 % 16 % 16 % 13 % 7% FY 2019 FY 2020 FY 2021 FY 2022 FY 2023 FY 2024 % OF NET SALES
Slide 47: Marketing ROI Multiples Above Industry Benchmarks
MARKETING ROI MULTIPLES ABOVE INDUSTRY BENCHMARKS
Slide 48: Unaided Awareness
U N A I D E D AWA R E N E S S 26 % 13 % 2020 2023 BOVITZ, INC. (2023 AUGUST) MAKEUP CATEGORY ATTITUDES & USAGE STUDY COMMISSIONED BY E.L.F. COSMETICS; CONFIDENTIAL & PROPRIETARY
Slide 49: Unaided Awareness vs. peers
U N A I D E D AWA R E N E S S 52 % 43 % 33 % 26 % E.L.F. L’ OREA L COVERGIRL MAYBELLINE BOVITZ, INC. (2023 AUGUST) MAKEUP CATEGORY ATTITUDES & USAGE STUDY COMMISSIONED BY E.L.F. COSMETICS; CONFIDENTIAL & PROPRIETARY
Slide 50: A Different Kind of Beauty Company
A DIFFERENT KIND OF BEAUTY COMPANY
Slide 51: A Different Kind of Company
A DIFFERENT KIND OF COMPANY. .
Slide 52: Out of 4,200
OUT OF 4,200 FACTSET, INTERNAL ESTIMATES
Slide 53: We Are 1 of 4
WE ARE 1 OF 4 FACTSET, INTERNAL ESTIMATES
Slide 54: 2/3 Women + 1/3 Diverse
2/3 WOMEN + 1/3 DIVERSE FACTSET, INTERNAL ESTIMATES
Slide 55: wah ib. Os
wah ib. Os “ELE. BEAUTY wi
Slide 56: Slide 56
Slide 57: Double Women & Diversity on Boards
GOAL DOUBLE WOMEN & DIVERSITY ON BOARDS GOAL TO DOUBLE ANNUAL GROWTH RATE
Slide 58: FY 2025
FY 2025
Slide 59: Areas with Significant Runway for Growth
A R E A S W I T H S I G N I F I C A N T R U N W AY F O R G R O W T H
Slide 60: e.l.f. Cosmetics Dollar Share
E . L . F. C O S M E T I C S $ S H A R E 12.8 % 10.5 % #2 4.1 % FY 2019 FY 2024 Q4 FY 2024 E.L.F. U.S. MASS COSMETICS SHARE, NIELSEN XAOC LATEST 52 WEEKS ENDING 3/23/2024, COLOR COSMETICS CATEGORY
Slide 61: e.l.f. Cosmetics Dollar Share National Target
E . L . F. C O S M E T I C S $ S H A R E 19.3 % 10.5% #1 NATIONAL TARGET $ SHARE $ SHARE NIELSEN XAOC LATEST 52 WEEKS ENDING 3/23/2024, COLOR COSMETICS CATEGORY
Slide 62: Dollar Share Growth
19.3 % > 70 % $ SHARE GROWTH NIELSEN XAOC LATEST 12 WEEKS ENDING 3/23/2024, COLOR COSMETICS CATEGORY. YEAR-OVER-YEAR TARGET NET SALES GROWTH IN FY 2024
Slide 63: e.l.f. Space Expansion
E . L . F. S P A C E E X P A N S I O N SPRING 2024 SUMMER 2024 FALL 2024 CVS WALMART CVS
Slide 64: Areas with Significant Runway for Growth
A R E A S W I T H S I G N I F I C A N T R U N W AY F O R G R O W T H
Slide 65: Skin Care Dollar Share
SKIN CARE $ SHARE 1.6% 14 % # 11 #1 E.L.F. SKIN LEADING BRAND NIELSEN XAOC LATEST 52 WEEKS ENDING 3/23/2024, FACIAL SKINCARE CATEGORY
Slide 66: Strong Innovation Pipeline
STRONG INNOVATION PIPELINE
Slide 67: Expanding Naturium into Ulta Beauty in Summer 2024
E X PA N D I N G N AT U R I U M I N T O U LTA B E A U T Y I N S U M M E R 2 0 2 4
Slide 68: Areas with Significant Runway for Growth
A R E A S W I T H S I G N I F I C A N T R U N W AY F O R G R O W T H
Slide 69: International Penetration vs. Peers
I N T E R N AT I O N A L P E N E T R AT I O N 15 % >70% E.L.F. BEAUTY MAJOR PUBLIC BEAUTY PEERS % OF NET SALES, E.L.F. BEAUTY FY 2024. PEERS BASED ON PUBLIC FILINGS FOR LATEST 12 MONTHS ENDING 12/31/2023
Slide 70: USA, Canada, UK Brand Rank
#2 #3 #4 BRAND BRAND BRAND USA CANADA UK $ SHARE, NIELSEN, UK L12W ENDING 4/6/2024 AND CANADA L12W ENDING 3/23/2024
Slide 71: e.l.f. Space Expansion
E . L . F. S P A C E E X P A N S I O N SPRING 2024 SUMMER 2024 FALL 2024 CVS WALMART CVS BOOTS SUPERDRUG SHOPPERS DRUG MART
Slide 72: Global Social Audience
GLOBAL SOCIAL AUDIENCE
Slide 73: Italy: #1 Brand at Douglas
#1 BRAND ITALY DOUGLAS BASED ON DOUGLAS ITALY RETAIL STORES SINCE LAUNCH
Slide 74: Netherlands: #1 Brand at Etos
#1 BRAND NETHERLANDS ETOS BASED ON ETOS NETHERLANDS RETAIL SALES SINCE LAUNCH
Slide 75: Fall 2024: Mexico
FALL 2024 MEXICO
Slide 76: Mandy Fields, SVP & Chief Financial Officer
MANDY FIELDS SVP & CHIEF FINANCIAL OFFICER
Slide 77: Agenda
AGENDA 1 2 Q4 & FY 2024 FY 2025 RESULTS OUTLOOK
Slide 78: Net Sales Growth
NET SALES + 71 % GROWTH UNITS AUR + 50 + 21 PPTS PPTS Q3 FY 2024 NET SALES
Slide 79: Digital Consumption Growth
D I G I TA L C O N S U M P T I O N ~70 % GROWTH Q4 FY 2024
Slide 80: Digital Penetration
D I G I TA L P E N E T R AT I O N 18 % 22 % Q4 FY 2023 Q4 FY 2024 % OF CONSUMPTION
Slide 81: Beauty Squad Loyalty Members
>4.8M MEMBERS > 30 % GROWTH Q4 FY 2024 GROWTH IN TOTAL ENROLLMENT VERSUS PY | BEAUTY SQUAD LOYALTY MEMBERS AS OF 3/31/2024
Slide 82: Loyalty: elfcosmetics.com Sales
L O YA LT Y ~ 80 % ELFCOSMETICS.COM SALES
Slide 83: e.l.f. Mobile App
E . L . F. M O B I L E A P P 4.8 >2 M RATING APP DOWNLOADS STATS AS OF APRIL 2024
Slide 84: Social media example
@cit | perfect brown e.L#f. lip combo for $10 NN metic ide Lip Liner
Slide 85: Q4 FY 2024 Gross Margin
71% GROSS MARGIN + 180 BPS Q4 FY 2024 GROSS MARGIN
Slide 86: Q4 FY 2024 Gross Margin Drivers
FAVORABLE FX RATES INTERNATIONAL PRICE INCREASES LOWER RETAILER ACTIVITY COSTS COST SAVINGS AND MIX INVENTORY ADJUSTMENTS I MPROVED TRANSPORTATION COSTS Q4 FY 2024 GROSS MARGIN DRIVERS
Slide 87: Adjusted SG&A
ADJUSTED SG&A 61 % 61 % Q4 FY 2023 Q4 FY 2024 % OF NET SALES
Slide 88: Marketing & Digital Investment
M A R K E T I N G & D I G I TA L I N V E S T M E N T 34 % 33 % Q4 FY 2023 Q4 FY 2024 % OF NET SALES
Slide 89: Adjusted EBITDA and Margin
+ 93 % $ 41 M YOY GROWTH ADJUSTED EBITDA 13 % ADJUSTED EBITDA MARGIN Q4 FY 2024
Slide 90: Adjusted Net Income & Adjusted EPS
ADJUSTED NET INCOME & ADJUSTED EPS $ 31 M $ 0.53 $ 24 M $ 0.42 Q4 FY 2023 Q4 FY 2024 Q4 FY 2023 Q4 FY 2024
Slide 91: FY 2024 Results
FY 2024 R E S U LT S
Slide 92: FY 2024 Results
FY 2024 RESULTS + 77 % +101% + 280 BPS NET SALES ADJUSTED EBITDA ADJ. EBITDA MARGIN FY 2024 YEAR-OVER-YEAR, AS COMPARED TO FY 2023
Slide 93: Marketing & Digital Investment
M A R K E T I N G & D I G I TA L 25 %OF NET SALES FY 2024
Slide 94: Balance Sheet & Cash Flow
BALANCE SHEET & CASH FLOW
Slide 95: $108M Cash on Hand
$108M CASH ON HAND ENDING CASH BALANCE, Q4 FY 2024
Slide 96: $191M Inventory
. or, Sat Tic ar - ” . >. . ~$191M_ INVENTORY ae Qa FY 2024
Slide 97: Inventory Drivers
INVENTORY DRIVERS STRONG ADDED EARLIER CONSUMER NATURIUM OWNERSHIP DEMAND INVENTORY OF INVENTORY Q4 FY 2024
Slide 98: Net Debt / LTM Adjusted EBITDA <1.0x
<1.0X NET DEBT / LTM ADJUSTED EBITDA Q4 FY 2024
Slide 99: Cash Flow Priorities
CASH FLOW PRIORITIES INVESTING IN GROWTH I NITIATIVES SUPPORTING STRATEGIC EXTENSIONS
Slide 100: FY 2025 Outlook
FY 2025 OUTLOOK
Slide 101: Fiscal 2025 Outlook
AVERAGE SHARES NET SALES ~59M + 20% TO 22% ADJUSTED TAX RATE FISCAL 2025 ADJUSTED EBITDA 20% TO 21% OUTLOOK $ 285M TO $ 289M ADJUSTED EPS ADJUSTED NET INCOME $ 3.20 TO $ 3.25 $ 187M TO $ 191M
Slide 102: Planning Assumptions
PLANNING ASSUMPTIONS
Slide 103: Q1 FY 2025 Expected Net Sales Growth
Q1 FY 2025 > 20-22 % NET SALES GROWTH (ABOVE FULL YEAR RANGE) ~ 20 % TRACKED CHANNEL GROWTH Q1 FY 2025 EXPECTED NET SALES GROWTH
Slide 104: Tracked vs. Untracked Channels
50% UNTRACKED TRACKED CHANNELS CHANNELS E.L.F. BEAUTY TRACKED CHANNELS % OF TOTAL E.L.F. BEAUTY CONSUMPTION POST NATURIUM ACQUISTION
Slide 105: Gross Margin Outlook
GROSS MARGIN OUTLOOK FAV O RAB L E FX RATES +10 MARGIN ACCRETIVE MIX BPS COST SAVINGS HIGHER TRANSPORTATION COSTS RETAILER ACTIVTY SPACE EXPANSION FY 2025 OUTLOOK, EXPECTED GROSS MARGIN DRIVERS
Slide 106: Marketing & Digital Outlook
M A R K E T I N G & D I G I TA L 24-26 % OF NE T SALES FY 2025 OUTLOOK
Slide 107: Adjusted EBITDA Growth 1H FY 2025
ADJUSTED EBITDA GROWTH +LSD – MSD 1H FY 2025 FY 2025 OUTLOOK, EXPECTED YEAR OVER YEAR ADJUSTED EBITDA GROWTH
Slide 108: Marketing & Digital Investment 1H vs 2H FY 2024
M A R K E T I N G & D I G I TA L I N V E S T M E N T 30 % 18 % 1H FY 2024 2H FY 2024 % OF NET SALES
Slide 109: FY 2025 Adjusted EBITDA Growth
FY 2025 OUTLOOK +21-23 % ADJ EBITDA GROWTH FY 2025 OUTLOOK, EXPECTED YEAR OVER YEAR ADJUSTED EBITDA GROWTH
Slide 110: Adjusted EBITDA Margin Leverage
FY 2025 OUTLOOK ADJ. EBITDA MARGIN LEVERAGE +20 BPS FY 2025 OUTLOOK, EXPECTED YEAR OVER YEAR ADJUSTED EBITDA MARGIN EXPANSION
Slide 111: Flywheel Approach to Driving Profitable Growth
F LY W H E E L A P P R O A C H T O D R I V I N G P R O F I TA B L E G R O W T H INVESTING IN MARKETING E X PA N D I N G DRIVE TOPLINE EBITDA MARGIN GROWTH
Slide 112: e.l.f. Beauty
C BEAUTY