E.l.f. Beauty, Inc. · NYSE:ELF
E.l.f. Beauty — Q1 2025 Earnings Presentation
108 slides from E.l.f. Beauty's earnings presentation, Aug 8, 2024
Slide 1: TRISE Agove
TRISE Agove YEE TRANSCENe
Slide 2: Tarang Amin, Chairman & Chief Executive Officer
TARANG AMIN CHAIRMAN & CHIEF EXECUTIVE OFFICER
Slide 3: Q1 FY 2025 Results and Outlook
1 2 Q1 FY 2025 RESULTS OUTLOOK
Slide 4: Q1 FY 2025 net sales, gross margin, adjusted EBITDA
+ 50 % + 80 $ 77 M BPS NET SALES GROSS MAR GIN ADJUSTED EBITDA Q1 FY 2025
Slide 5: Net sales growth by quarter
+71% +50% +85% +76% +76% +78% +49% +26%+33% +13% +24% +50% +27%+11% +10% +8% +16% +3% +11% +8% +7% +7% FY 19 FY 20 FY 21 FY 22 FY 23 FY 24 FY 25 BARS REPRESENT NET SALES WITH YOY GROWTH % NET SALES GROWTH BY QUARTER, EXCLUDING E.L.F. STORES (CLOSED IN FEBRUARY 2019)
Slide 6: Quarters of greater than 20% growth
1 OF 5 OUT OF 274 22 QUARTERS >20% GROWTH FACTSET, INCLUDES PUBLICLY TRADED COMPANIES IN THE XRT AND XLP INDICES
Slide 7: Cosmetics
J : A eX ‘ ‘ : : * * ’ ‘ ‘ 6 ‘ . es COSMETICS 3
Slide 8: Color cosmetics consumption growth
CONSUMPTION + 26 % –1% COLOR CATEGORY E.L.F. COSMETICS YOY CONSUMPTION GROWTH. NIELSEN XAOC LATEST 12 WEEKS ENDING 6/15/2024, COLOR COSMETICS CATEGORY
Slide 9: Dollar share growth versus competitors
$ SHARE GROWTH + 260 -15 -25 -35 -70 MAYBELLINE L’ OREA L E.L.F. COVERGIRL REVLON NIELSEN XAOC LATEST 12 WEEKS ENDING 6/15/2024, COLOR COSMETICS CATEGORY
Slide 10: e.l.f. Cosmetics dollar share
E . L . F. C O S M E T I C S $ S H A R E 12.3 % #2 5.7% #5 Q1 FY 2022 Q1 FY 2025 NIELSEN XAOC LATEST 24 WEEKS ENDING 6/15/2024, COLOR COSMETICS CATEGORY
Slide 11: e.l.f. Cosmetics dollar share at Target
E . L . F. C O S M E T I C S $ S H A R E A T T A R G E T 21.4 % #1 12.7 % #1 Q3 FY 2023 Q1 FY 2025 NIELSEN XAOC LATEST 24 WEEKS ENDING 6/15/2024, COLOR COSMETICS CATEGORY
Slide 12: Skin care
. ry * * ‘ . ) . sal . x . . * om — SKIN CARE ‘
Slide 13: Skin care consumption growth
CONSUMPTION + 45 % 32 X +1.4% SKIN CARE CATEGORY E.L.F. SKIN YOY CONSUMPTION GROWTH. NIELSEN XAOC LATEST 12 WEEKS ENDING 6/15/2024, FACIAL SKIN CARE CATEGORY
Slide 14: Skin care share gain
SHARE GAIN + 60 BPS NIELSEN XAOC LATEST 12 WEEKS ENDING 3/23/2024, FACIAL SKIN CARE CATEGORY
Slide 15: Skin care ranking
#9 # 13 NIELSEN XAOC LATEST 12 WEEKS ENDING 3/23/2024, FACIAL SKIN CARE CATEGORY
Slide 16: Skin care dollar share
SKIN CARE $ SHARE 2% 14 % #9 #1 E.L.F. SKIN LEADING BRAND NIELSEN XAOC LATEST 12 WEEKS ENDING 6/15/2024, FACIAL SKINCARE CATEGORY
Slide 17: Net sales growth contribution from Naturium
+16 PPTS NET SALES GROWTH Q1 FY 2025 NET SALES GROWTH CONTRIBUTION FROM NATURIUM
Slide 18: International
__ INTERNATIONAL =
Slide 19: International net sales growth
91% INTERNATIONAL NET SALES GROWTH Q1 FY 2025 YEAR-OVER YEAR INTERNATIONAL NET SALES GROWTH
Slide 20: UK and Canada market share
#4 #4 #6 #8 UK CANADA $ SHARE, NIELSEN, UK L12W ENDING 4/6/2024 AND CANADA L12W ENDING 3/23/2024
Slide 21: Global social audience
GLOBAL SOCIAL AUDIENCE
Slide 22: Netherlands and Italy launches
#1 #1 BRAND BRAND NETHERLANDS ITALY ETOS DOUGLAS BASED ON ETOS NETHERLANDS RETAIL SALES SINCE LAUNCH BASED ON DOUGLAS ITALY RETAIL STORES SINCE LAUNCH
Slide 23: International penetration versus peers
I N T E R N AT I O N A L P E N E T R AT I O N 16 % >70% E.L.F. BEAUTY MAJOR PUBLIC BEAUTY PEERS % OF NET SALES, E.L.F. BEAUTY Q1 FY 2025. PEERS BASED ON PUBLIC FILINGS FOR LATEST 12 MONTHS ENDING 12/31/2023
Slide 24: Cosmetics and skin care brands by sales
>$700M IN SALES 5 26 >$100M IN SALES 61 >$25M IN SALES >1, 900 COSMETICS & SKIN CARE BRANDS NIELSEN XAOC, LATEST 52 WEEKS ENDING 6/15/2024, COLOR COSMETICS AND FACIAL SKIN CARE CATEGORIES
Slide 25: Five areas of advantage
F I V E A R E A S O F A D VA N TA G E PASSIONATE OWNERS PRODUCTIVITY VALUE MODEL PROPOSITION DISRUPTIVE POWERHOUSE MARKETING ENGINE INNOVATION
Slide 26: Passionate owners
F I V E A R E A S O F A D VA N TA G E PASSIONATE OWNERS
Slide 27: Employees
> 500 EMPLOYEES
Slide 28: Only public consumer company granting every employee equity
O N LY P U B L I C C O N S U M E R C O M PA N Y T H AT G R A N T S E V E R Y E M P L O Y E E E Q U I T Y, E V E R Y Y E A R e . l . f . l d e r r e h o sha
Slide 29: Equity granted facts
FACTS. ~ 180 M $ EQUITY GRANTED >10 X STOCK PRICE INCREASE EQUITY GRANTED SINCE IPO, EXCLUDING EXECUTIVE OFFICERS
Slide 30: Employee engagement
EMPLOYEE ENGAGEMENT 90 % 72% +18 PPTS CONSUMER GOODS E.L.F. BEAUTY CULTURE AMP
Slide 31: Value proposition
F I V E A R E A S O F A D VA N TA G E PASSIONATE OWNERS VALUE PROPOSITION
Slide 32: Average unit retail 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 6/15/2024, COLOR COSMETICS CATEGORY. CIRCANA LATEST 52 WEEKS ENDING 12/31/2023
Slide 33: Asset-light supply chain model
A S S E T- L I G H T S U P P LY C H A I N M O D E L QUALITY COST SPEED
Slide 34: Prestige quality at accessible price point
D E L I V E R I N G P R E S T I G E Q U A L I T Y AT A N A C C E S S I B L E P R I C E P O I N T $14 $10 $8 $12 VS $49 VS $38 VS $40 VS $38 PRESTIGE PRESTIGE PRESTIGE PRESTIGE
Slide 35: Unit volume growth
UNIT VOLUME GROWTH +25% -8% -7% -8% -15% MAYBELLINE L’ OREA L E.L.F. COVERGIRL REVLON YEAR-OVER-YEAR CHANGE IN UNITS, NIELSEN XAOC LATEST 12 WEEKS ENDING 6/15/2024, COLOR COSMETICS CATEGORY
Slide 36: Powerhouse innovation
F I V E A R E A S O F A D VA N TA G E PASSIONATE OWNERS VALUE PROPOSITION POWERHOUSE INNOVATION
Slide 37: Innovation approach focused on building franchises
I N N O VAT I O N A P P R O A C H F O C U S E D O N B U I L D I N G F R A N C H I S E S B E H I N D O U R “ H O LY G R A I L S ”
Slide 38: Category leadership in 2018
#1 PRIMER $ SHARE #2 #1 COSMETIC BRUSHES ACCESSORY $ SHARE UNIT SHARE #1 EYE PRIMER $ SHARE 8 SEGMENTS IN 2018 #1 SETTING SPRAY $ SHARE #1 #1 EYELASH HIGHLIGHT CURLER /CONTOUR UNIT SHARE $ SHARE #1 MULTI-FACE UNIT SHARE NIELSEN XAOC LATEST 52 WEEKS ENDING 12/30/2018, COLOR COSMETICS CATEGORY
Slide 39: Category leadership in 2024
#1 #2 BLUSH SPONGES $ SHARE $ SHARE #1 PRIMER $ SHARE #1 #1 LIP #2 #1 BRUSHES GLOSS EYE EYEBROW $ SHARE UNIT SHARE $ SHARE SHADOW UNIT SHARE #1 LIP SHINE UNIT SHARE #1 EYE PRIMER $ SHARE 18 SEGMENTS IN 2024 #1 SETTING SPRAY UNIT SHARE #2 COSMETIC ACCESSORY UNIT SHARE #1 #2 #1 #1 COSMETIC CONCEALER E
Slide 40: e.l.f. foundation dollar share
E . L . F. D O L L A R S H A R E 12.3 % 1.5 % $ 675 M C AT E G O RY COSMETICS FOUNDATION DOLLAR SHARE. NIELSEN XAOC LATEST 24 WEEKS ENDING 6/15/2024
Slide 41: Soft Glam Satin Foundation versus prestige
VS $ 39 PRESTIGE $8 SOFT GLAM SATIN FOUNDATION
Slide 42: New bestseller
NEW BESTSELLER ELFCOSMETICS.COM IN Q1
Slide 43: 1 million bottles sold
NATURIUM. low Getter Multi-Oil \ The Glow Gi Multi-Oil NATURIUM The Glow Getter Multi-Oil ody Wash NATURIUM ATURIUM he Glow Getter 1¢ Glow Getter Multi-Oil Malti-Oil Body Wash Body Wash 16.9 FL OZ / 500M
Slide 44: Sold out in 10 days
SOLD OUT IN 10 DAYS NATURIUM.COM
Slide 45: Five areas of advantage
F I V E A R E A S O F A D VA N TA G E PASSIONATE OWNERS VALUE PROPOSITION DISRUPTIVE POWERHOUSE MARKETING ENGINE INNOVATION
Slide 46: Best-in-class in creating culturally relevant output
B E S T- I N - C L A S S I N C R E AT I N G C U L T U R A L LY R E L E VA N T O U T P U T JANUARY FEBRUARY FEBRUARY MARCH MARCH APRIL APRIL M AY JUNE J U LY
Slide 47: Social media reaction
sebastian I'm on my e.l.f.ing knees BEGGING for bronzing drops @ @ @
Slide 48: Peculiar Behavior campaign for bronzing drops
D E B U T E D “ P E C U L I A R B E H AV I O R ” C A M PA I G N T O A C C O M PA N Y B R O N Z I N G D R O P S P R O D U C T L A U N C H
Slide 49: Change the Board Game campaign
SO AHOAAHAAOM MANY ®®2@Q@Q@@M DICKS 2H9AAOAM bathed SO FEW OF rela EVERYONE ELSE than entire groups of underrepresented people. See our methodology at ChangeTheBoardGame.com
Slide 50: It's OK to be a dick
IT’S OK TO BE A DICK. BUT AMERICA’S BOARDROOMS NEED MORE OF EVERYONE ELSE. AG ChangeTheBoardGame.com
Slide 51: We are 1 of 4
WE ARE 1 OF 4 FACTSET, INTERNAL ESTIMATES
Slide 52: 2/3 women and 1/3 diverse
2/3 WOMEN + 1/3 DIVERSE FACTSET, INTERNAL ESTIMATES
Slide 53: Product, purpose, platforms
PRODUCT PURPOSE .. PLATFORMS
Slide 54: e.l.f. UP! experience on Roblox
E . L . F. U P ! E X P E R I E N C E O N R O B L O X #1 95 % ~ 14 M BRANDED EXPERIENCE RATING PLAYS STATS AS OF JULY 2024
Slide 55: First beauty brand to test real-world commerce on Roblox
1ST BEAUTY BRAND TO TEST REAL-WORLD COMMERCE ON ROBLOX
Slide 56: Marketing ROI multiples above industry benchmarks
MARKETING ROI MULTIPLES ABOVE INDUSTRY BENCHMARKS
Slide 57: Unaided awareness
U N A I D E D AWA R E N E S S 33 % +20 PT 13 % 2020 2024 BOVITZ, INC. (2024 AUGUST) MAKEUP CATEGORY ATTITUDES & USAGE STUDY COMMISSIONED BY E.L.F. COSMETICS; CONFIDENTIAL & PROPRIETARY
Slide 58: Unaided awareness versus competitors
U N A I D E D AWA R E N E S S 55 % 39 % 41 % 33 % E.L.F. L’ OREA L COVERGIRL MAYBELLINE Age 20 Age 114 Age 63 Age 109 BOVITZ, INC. (2024 AUGUST) MAKEUP CATEGORY ATTITUDES & USAGE STUDY COMMISSIONED BY E.L.F. COSMETICS; CONFIDENTIAL & PROPRIETARY
Slide 59: Five areas of advantage
F I V E A R E A S O F A D VA N TA G E PASSIONATE OWNERS PRODUCTIVITY VALUE MODEL PROPOSITION DISRUPTIVE POWERHOUSE MARKETING ENGINE INNOVATION
Slide 60: elfcosmetics.com limited-time product
BB cit. Cosmetics: Affordable) x = v € G 2% elfcosmetics.com/?gad_source=1&gclid=CjwkCAjw5 Ky IBhAgEIwASjGujiEWvOjyMpdNJKNaWEgawsOEGg... C& se ic oo 37 4 @ @& Hi there it's baaaack! duochrome liquid eyeshadow Mesmer-eyes at every angle with fan-fave, color-shifting shadow in 4 shades— here for a lim
Slide 61: Average SKU count and sales per SKU at Target
AV G . S K U C O U N T SALES / SKU ~ 2x INCREASE 2018 2019 2020 2021 2022 2023 2018 2023 NIELSEN, E.L.F. COSMETICS AT TARGET, L52W ENDING 12/30/2023, COLOR COSMETICS CATEGORY
Slide 62: #1 most productive brand
#1 MOST PRODUCTIVE BRAND MEASURED ON DOLLARS PER LINEAR FEET, COLOR COSMETICS CATEGORY
Slide 63: #1 most productive brand
#1 MOST PRODUCTIVE BRAND MEASURED ON DOLLARS PER LINEAR FEET, COLOR COSMETICS CATEGORY
Slide 64: Launched Naturium in Ulta Beauty
L A U N C H E D N AT U R I U M I N U LTA B E A U T Y
Slide 65: 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 66: New markets
NEW MARKETS
Slide 67: Slide 67
Slide 68: Fall 2024
FALL 2024
Slide 69: Fall 2024
FALL 2024
Slide 70: Five areas of advantage
F I V E A R E A S O F A D VA N TA G E PASSIONATE OWNERS PRODUCTIVITY VALUE MODEL PROPOSITION DISRUPTIVE POWERHOUSE MARKETING ENGINE INNOVATION
Slide 71: Mandy Fields, SVP & Chief Financial Officer
MANDY FIELDS SVP & CHIEF FINANCIAL OFFICER
Slide 72: Q1 FY 2025 Results and Outlook
1 2 Q1 FY 2025 RESULTS OUTLOOK
Slide 73: Net sales growth, units and AUR
NET SALES + 50 % GROWTH UNITS AUR + 34 +16 PPTS PPTS Q1 FY 2025
Slide 74: Digital consumption growth
D I G I TA L C O N S U M P T I O N >40 % GROWTH Q1 FY 2025. INCLUDES NATURIUM IN YEAR AGO PERIOD
Slide 75: Digital penetration
D I G I TA L P E N E T R AT I O N 18 % 21 % Q1 FY 2024 Q1 FY 2025 % OF CONSUMPTION. EXCLUDES NATURIUM IN YEAR AGO PERIOD
Slide 76: Beauty Squad members
>5M MEMBERS 30 % GROWTH Q1 FY 2025 GROWTH IN TOTAL ENROLLMENT VERSUS PY | BEAUTY SQUAD LOYALTY MEMBERS AS OF 6/30/2024
Slide 77: Loyalty member benefits
HIGHER STRONGER AVG ORDER RETENTION VALUES RATES PURCHASE RICH SOURCE MORE OF FIRST- FREQUENTLY PARTY DATA
Slide 78: Exclusive early access and partner integrations
EXCLUSIVE UNIQUE EARLY PARTNER ACCESS INTEGRATIONS
Slide 79: First-ever Beauty Squad challenge within Roblox
F I R S T- E V E R B E A U T Y S Q U A D C H A L L E N G E W I T H I N R O B L O X 98 % NEW BEAUTY SQUAD MEMBERS
Slide 80: Expanded Beauty Squad to Amazon
E X PA N D E D B E A U T Y S Q U A D T O A M A Z O N
Slide 81: Gross margin
71% GROSS MARGIN + 80 BPS Q1 FY 2025
Slide 82: Q1 FY 2025 gross margin drivers
FAVORABLE FX RATES LOWER TRANSPORTATION COSTS INTERNATIONAL PRICE INCREASES COST SAVINGS AND MIX INVENTORY ADJUSTMENTS Q1 FY 2025 GROSS MARGIN DRIVERS
Slide 83: Adjusted SG&A
ADJUSTED SG&A 51 % 39 % Q1 FY 2024 Q1 FY 2025 % OF NET SALES
Slide 84: Marketing and 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 23 % 16 % Q1 FY 2024 Q1 FY 2025 % OF NET SALES
Slide 85: Drivers of non-marketing SG&A
DRIVERS OF NON-MARKETING SG&A INCLUSION OF INVESTMENTS NATURUIM IN E.L.F. TEAM & IN FINANCIALS INFRASTRUCTURE Q1 FY 2025
Slide 86: Adjusted EBITDA and margin
$ 77 M ADJUSTED EBITDA 24 % ADJUSTED EBITDA MARGIN Q1 FY 2025
Slide 87: Adjusted net income and adjusted EPS
ADJUSTED NET INCOME & ADJUSTED EPS $ 63 M $ 64 M $ 1.10 $ 1.10 Q1 FY 2024 Q1 FY 2025 Q1 FY 2024 Q1 FY 2025
Slide 88: Balance sheet & cash flow
BALANCE SHEET & CASH FLOW
Slide 89: Cash on hand
$109 M CASH ON HAND ENDING CASH BALANCE, Q1 FY 2025
Slide 90: Inventory
ae . SES “INVENTORY ~ 1 FY 2025
Slide 91: Inventory drivers
INVENTORY DRIVERS STRONG ADDED EARLIER CONSUMER NATURIUM OWNERSHIP DEMAND INVENTORY OF INVENTORY Q1 FY 2025
Slide 92: Net debt / LTM adjusted EBITDA
<1 X NET DEBT / LTM ADJUSTED EBITDA Q1 FY 2025
Slide 93: Cash flow priorities
CASH FLOW PRIORITIES INVESTING IN G R O W T H I N I T I AT I V E S SUPPORTING S T R AT E G I C E X T E N S I O N S
Slide 94: FY 2025 Outlook
FY 2025 OUTLOOK
Slide 95: Fiscal 2025 outlook
NET SALES ADJUSTED EBITDA + 25% TO 27% $ 297M TO $ 301M FISCAL 2025 OUTLOOK ADJUSTED EPS ADJUSTED NET INCOME $ 3.36 TO $ 3.41 $ 198M TO $ 201M
Slide 96: Planning assumptions
PLANNING ASSUMPTIONS
Slide 97: Raised topline outlook
RAISED TOPLINE OUTLOOK Q1 ONGOING OUTPERFORMANCE MOMENTUM
Slide 98: Q2 FY 2025 net sales growth outlook
Q2 FY 2025 > 25-27 % NET SALES GROWTH (SLIGHTLY ABOVE FULL YEAR RANGE) ~ 20 % TRACKED CHANNEL GROWTH Q2 FY 2025 EXPECTED NET SALES GROWTH
Slide 99: Tracked channels share of consumption
50% UNTRACKED TRACKED CHANNELS CHANNELS E.L.F. BEAUTY TRACKED CHANNELS % OF TOTAL E.L.F. BEAUTY CONSUMPTION POST NATURIUM ACQUISTION
Slide 100: Gross margin outlook
GROSS MARGIN OUTLOOK + 20 BPS FY 2025 OUTLOOK, EXPECTED YEAR OVER YEAR GROSS MARGIN CHANGE
Slide 101: Expected gross margin drivers
FAV O RAB L E FX RATES MARGIN ACCRETIVE MIX COST SAVINGS HIGHER TRANSPORTATION COSTS RETAILER ACTIVITY SPACE EXPANSION FY 2025 OUTLOOK, EXPECTED GROSS MARGIN DRIVERS
Slide 102: Gross margin outlook FY and Q2
GROSS MARGIN OUTLOOK +20 BPS (FY 2025) ~FLAT (Q2 FY 2025) FY 2025 OUTLOOK, EXPECTED YEAR OVER YEAR GROSS MARGIN CHANGE
Slide 103: Adjusted EBITDA growth outlook
FY 2025 OUTLOOK +26-28 % ADJ EBITDA GROWTH FY 2025 OUTLOOK, EXPECTED YEAR OVER YEAR ADJUSTED EBITDA GROWTH
Slide 104: 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 105: Marketing and 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 106: Drivers of Q2 adjusted EBITDA margin
DRIVERS OF Q2 ADJUSTED EBITDA MARGIN STEP-UP IN ANNUALIZING MARKETING ACQUISITION OF SPEND NATURIUM Q2 FY 2025 OUTLOOK, EXPECTED ADJUSTED EBITDA MARGIN
Slide 107: Q2 FY 2025 adjusted EBITDA margin
Q2 FY 2025 LOW-TEENS ADJUSTED EBITDA MARGIN Q2 FY 2025 OUTLOOK, EXPECTED ADJUSTED EBITDA MARGIN
Slide 108: TRISE Agove
TRISE Agove YEE TRANSCENe