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e.l.f. Beauty, Inc. (ELF - Free Report) is defying the gloomy predictions that the consumer would pull back on spending. This Zacks Rank #1 (Strong Buy) recently beat again on earnings and raised full year guidance.
e.l.f. Beauty is a multi-brand beauty company that includes e.l.f. Cosmetics, e.l.f. SKIN, Well People and Keys Soulcare, a lifestyle beauty brand created with Alicia Keys.
It's brands are sold across a range of retailers in the United States and has a growing international presence.
7th Beat in a Row in the Fiscal Second Quarter
On Nov 2, 2022, e.l.f. Beauty reported its fiscal second quarter results and blew by the Zacks Consensus by $0.20. Earnings were $0.36 versus the Zacks Consensus of $0.20.
It was the 7th consecutive big earnings beat in a row. It has only missed on earnings once since 2019.
Second quarter sales were up 33% to $122.3 million driven by strength in both the retailer and e-commerce channels. e.l.f. Cosmetics were up 27% and e.l.f. Skin jumped 44%.
Gross margin rose 190 basis points to 65% due to price increases, cost savings and product mix, partially offset by inventory adjustments and higher transportation costs.
Raised Sales and Earnings Guidance
With the strong quarter and the holidays approaching, e.l.f. Beauty is bullish on the fiscal year. What consumer slowdown?
It raised its sales guidance to a range of $478 million to $486 million from $448 million to $456 million, which is sales growth between 22% and 24%, up from prior guidance of 14% to 16%.
e.l.f. Beauty also now sees earnings in the range of $1.07 to $1.10, up from $0.84 to $0.87.
Given the strong guide higher, it's not surprising that the analysts all raised their earnings estimates as well.
10 estimates were raised for fiscal 2023 and fiscal 2024 since the earnings report. That pushed the fiscal 2023 Zacks Consensus up to $1.10 from $0.90 just 30 days ago, which is the high end of the company's new range.
That is earnings growth of 31%.
The fiscal 2024 Zacks Consensus also jumped higher, rising to $1.22 from $0.99 in the last month. That's further growth of 11%.
Shares Soar to 5-Year Highs
After the beat and the raise, shares soared to new 5-year highs, but they've been rallying for most of the year.
Year-to-date the shares have jumped 49.5% versus the S&P 500 which is actually down 16.6% during the same time.
Image Source: Zacks Investment Research
It's not cheap, with a forward P/E of 47. But investors are obviously willing to pay up for the growth in the beauty industry.
For investors looking for a growth stock that is still seeing the growth this year, e.l.f. Beauty is one to keep on the short list.
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Bull of the Day: e.l.f. Beauty (ELF)
e.l.f. Beauty, Inc. (ELF - Free Report) is defying the gloomy predictions that the consumer would pull back on spending. This Zacks Rank #1 (Strong Buy) recently beat again on earnings and raised full year guidance.
e.l.f. Beauty is a multi-brand beauty company that includes e.l.f. Cosmetics, e.l.f. SKIN, Well People and Keys Soulcare, a lifestyle beauty brand created with Alicia Keys.
It's brands are sold across a range of retailers in the United States and has a growing international presence.
7th Beat in a Row in the Fiscal Second Quarter
On Nov 2, 2022, e.l.f. Beauty reported its fiscal second quarter results and blew by the Zacks Consensus by $0.20. Earnings were $0.36 versus the Zacks Consensus of $0.20.
It was the 7th consecutive big earnings beat in a row. It has only missed on earnings once since 2019.
Second quarter sales were up 33% to $122.3 million driven by strength in both the retailer and e-commerce channels. e.l.f. Cosmetics were up 27% and e.l.f. Skin jumped 44%.
Gross margin rose 190 basis points to 65% due to price increases, cost savings and product mix, partially offset by inventory adjustments and higher transportation costs.
Raised Sales and Earnings Guidance
With the strong quarter and the holidays approaching, e.l.f. Beauty is bullish on the fiscal year. What consumer slowdown?
It raised its sales guidance to a range of $478 million to $486 million from $448 million to $456 million, which is sales growth between 22% and 24%, up from prior guidance of 14% to 16%.
e.l.f. Beauty also now sees earnings in the range of $1.07 to $1.10, up from $0.84 to $0.87.
Given the strong guide higher, it's not surprising that the analysts all raised their earnings estimates as well.
10 estimates were raised for fiscal 2023 and fiscal 2024 since the earnings report. That pushed the fiscal 2023 Zacks Consensus up to $1.10 from $0.90 just 30 days ago, which is the high end of the company's new range.
That is earnings growth of 31%.
The fiscal 2024 Zacks Consensus also jumped higher, rising to $1.22 from $0.99 in the last month. That's further growth of 11%.
Shares Soar to 5-Year Highs
After the beat and the raise, shares soared to new 5-year highs, but they've been rallying for most of the year.
Year-to-date the shares have jumped 49.5% versus the S&P 500 which is actually down 16.6% during the same time.
Image Source: Zacks Investment Research
It's not cheap, with a forward P/E of 47. But investors are obviously willing to pay up for the growth in the beauty industry.
For investors looking for a growth stock that is still seeing the growth this year, e.l.f. Beauty is one to keep on the short list.