e.l.f. Beauty Announces Fourth Quarter and Full Fiscal 2024 Results
– Delivered Over
– e.l.f. Cosmetics Gained Market Share for Fifth Consecutive Year –
– Provides Fiscal 2025 Outlook –
“Fiscal 2024 marked our strongest year of net sales growth on record, a continuation of the exceptional, consistent, category-leading growth we’ve delivered,” said
Fourth Quarter Fiscal 2024 Review
For the three months ended
-
Net sales increased 71% to
$321.1 million , primarily driven by strength across our retailer and e-commerce channels.
- Gross margin increased approximately 180 basis points to 71%, primarily driven by favorable foreign exchange impacts, international price increases, lower costs from retailer activity, cost savings and mix, and improved transportation costs, partially offset by inventory adjustments.
-
Selling, general and administrative (“SG&A”) expenses increased
$89.1 million to$210.2 million , or 65% of net sales. Adjusted SG&A (SG&A excluding the items identified in the reconciliation table below) was$196.9 million , or 61% of net sales. The year over year increase in SG&A dollars was primarily due to an increase in marketing and digital spend, compensation and benefits, operations costs, retail fixturing and visual merchandising costs, depreciation and amortization and professional fees.
-
Net income was
$14.5 million on a GAAP basis. Adjusted net income (net income excluding the items identified in the reconciliation table below) was$30.8 million .
-
Diluted earnings per share were
$0.25 on a GAAP basis. Adjusted diluted earnings per share (diluted earnings per share calculated with adjusted net income excluding the items identified in the reconciliation table below) were$0.53 .
-
Adjusted EBITDA (EBITDA excluding the items identified in the reconciliation table below) was
$40.9 million , or 13% of net sales, up 93% year over year.
Full Year Fiscal 2024 Review
For the twelve months ended
-
Net sales increased 77% to
$1,023.9 million , primarily driven by strength across our retailer and e-commerce channels.
- Gross margin increased approximately 330 basis points to 71%, primarily driven by favorable foreign exchange impacts, cost savings and mix, improved transportation costs, inventory adjustments, and international price increases, partially offset by costs related to retailer activity.
-
SG&A increased
$252.2 million to$574.4 million , or 56% of net sales. Adjusted SG&A was$526.4 million , or 51% of net sales. The year over year increase in SG&A dollars was primarily due to an increase in marketing and digital spend, compensation and benefits, operations costs, retail fixturing and visual merchandising costs, depreciation and amortization and professional fees.
-
Net income was
$127.7 million on a GAAP basis. Adjusted net income was$183.8 million .
-
Diluted earnings per share were
$2.21 on a GAAP basis. Adjusted diluted earnings per share were$3.18 .
-
Adjusted EBITDA was
$234.7 million , or 23% of net sales, up 101% year over year.
Balance Sheet
The Company ended fiscal 2024 with
Naturium Acquisition
On
Fiscal 2025 Outlook
The Company is providing the following outlook for fiscal 2025. When compared to fiscal 2024, the outlook for fiscal 2025 reflects an expected 20-22% increase in net sales.
|
|
Fiscal 2025 Outlook |
|
Fiscal 2024 Actuals |
Net sales |
|
|
|
|
Adjusted EBITDA |
|
|
|
|
Adjusted effective tax rate |
|
20-21% |
|
11% |
Adjusted net income |
|
|
|
|
Adjusted diluted earnings per share |
|
|
|
|
Weighted average diluted shares outstanding |
|
59 million |
|
58 million |
Webcast Details
The Company will hold a webcast to discuss the results from its fourth quarter fiscal 2024 today,
About
Learn more by visiting https://investor.elfbeauty.com.
Note Regarding non-GAAP Financial Measures
This press release includes references to non-GAAP measures, including adjusted EBITDA, adjusted SG&A, adjusted net income and adjusted diluted earnings per share. The Company presents these non-GAAP measures because its management uses them as supplemental measures in assessing its operating performance, and believes they are helpful to investors, securities analysts and other interested parties in evaluating the Company’s performance. The non-GAAP measures included in this press release are not measurements of financial performance under GAAP and they should not be considered as alternatives to or substitutes for measures of performance derived in accordance with GAAP. In addition, these non-GAAP measures should not be construed as an inference that the Company’s future results will be unaffected by unusual or non-recurring items. These non-GAAP measures have limitations as analytical tools, and you should not consider such measures either in isolation or as substitutes for analyzing the Company’s results as reported under GAAP. The Company’s definitions and calculations of these non-GAAP measures are not necessarily comparable to other similarly titled measures used by other companies due to different methods of calculation.
Adjusted EBITDA excludes expense or income related to stock-based compensation, impairment of equity investment, loss on extinguishment of debt and other non-cash and non-recurring items. Such other non-cash or non-recurring items include amortization of internal-use software costs related to cloud applications, costs related to the acquisition of Naturium, and cloud computing ERP implementation costs.
Adjusted SG&A excludes expense related to stock-based compensation and other non-recurring items. Such other non-recurring items include other non-recurring cloud computing ERP implementation costs and costs related to the acquisition of Naturium.
Adjusted effective tax rate is the tax rate when excluding the pre-tax impact of expense or income related to stock-based compensation, other non-cash and non-recurring items, impairment of equity investment, loss on extinguishment of debt, amortization of acquired intangible assets, as well as the related tax impact for these items, calculated utilizing the statutory rate for where the impact was incurred.
Adjusted net income excludes expense or income related to stock-based compensation, other non-recurring items, impairment of equity investment, loss on extinguishment of debt, amortization of acquired intangible assets and the tax impact of the foregoing adjustments. Such other non-recurring items include other non-recurring cloud computing ERP implementation costs and costs related to the acquisition of Naturium.
With respect to the Company’s expectations under “Fiscal 2025 Outlook” above, the Company is not able to provide a quantitative reconciliation of the adjusted EBITDA, adjusted net income and adjusted diluted earnings per share guidance non-GAAP measures to the corresponding net income and diluted earnings per share GAAP measures without unreasonable efforts. The Company cannot provide meaningful estimates of the non-recurring charges and credits excluded from these non-GAAP measures due to the forward-looking nature of these estimates and their inherent variability and uncertainty. For the same reasons, the Company is unable to address the probable significance of the unavailable information.
Forward-looking Statements
This press release contains forward-looking statements within the meaning of the federal securities laws, including those statements relating to the Company's outlook for fiscal 2025 under “Fiscal 2025 Outlook” above and those statements that we believe we are still in the early innings of unlocking the full potential we see for
|
||||||||||||||||
Condensed consolidated statements of operations |
||||||||||||||||
(unaudited) |
||||||||||||||||
(in thousands, except share and per share data) |
||||||||||||||||
|
|
Three months ended |
|
Twelve months ended |
||||||||||||
|
|
2024 |
|
2023 |
|
2024 |
|
2023 |
||||||||
|
|
|
|
|
|
|
|
|
||||||||
Net sales |
|
$ |
321,143 |
|
|
$ |
187,357 |
|
|
$ |
1,023,932 |
|
|
$ |
578,844 |
|
Cost of sales |
|
|
93,941 |
|
|
|
58,231 |
|
|
|
299,836 |
|
|
|
188,448 |
|
Gross profit |
|
|
227,202 |
|
|
|
129,126 |
|
|
|
724,096 |
|
|
|
390,396 |
|
Selling, general and administrative expenses |
|
|
210,172 |
|
|
|
121,081 |
|
|
|
574,418 |
|
|
|
322,253 |
|
Operating income |
|
|
17,030 |
|
|
|
8,045 |
|
|
|
149,678 |
|
|
|
68,143 |
|
Other (expense) income, net |
|
|
(692 |
) |
|
|
320 |
|
|
|
1,210 |
|
|
|
(1,875 |
) |
Impairment of equity investment |
|
|
(1,155 |
) |
|
|
— |
|
|
|
(2,875 |
) |
|
|
— |
|
Interest expense, net |
|
|
(4,002 |
) |
|
|
(106 |
) |
|
|
(7,023 |
) |
|
|
(2,018 |
) |
Loss on extinguishment of debt |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(176 |
) |
Income before income taxes |
|
|
11,181 |
|
|
|
8,259 |
|
|
|
140,990 |
|
|
|
64,074 |
|
Income tax benefit (provision) |
|
|
3,346 |
|
|
|
7,987 |
|
|
|
(13,327 |
) |
|
|
(2,544 |
) |
Net income |
|
$ |
14,527 |
|
|
$ |
16,246 |
|
|
$ |
127,663 |
|
|
$ |
61,530 |
|
Net income per share: |
|
|
|
|
|
|
|
|
||||||||
Basic |
|
$ |
0.26 |
|
|
$ |
0.31 |
|
|
$ |
2.33 |
|
|
$ |
1.17 |
|
Diluted |
|
$ |
0.25 |
|
|
$ |
0.29 |
|
|
$ |
2.21 |
|
|
$ |
1.11 |
|
Weighted average shares outstanding: |
|
|
|
|
|
|
|
|
||||||||
Basic |
|
|
55,465,190 |
|
|
|
53,189,447 |
|
|
|
54,747,930 |
|
|
|
52,474,811 |
|
Diluted |
|
|
58,487,557 |
|
|
|
56,641,510 |
|
|
|
57,788,454 |
|
|
|
55,337,554 |
|
|
||||||||
Condensed consolidated balance sheets |
||||||||
(unaudited) |
||||||||
(in thousands, except share and per share data) |
||||||||
|
|
|
|
|
||||
Assets |
|
|
|
|
||||
Current assets: |
|
|
|
|
||||
Cash and cash equivalents |
|
$ |
108,183 |
|
|
$ |
120,778 |
|
Accounts receivable, net |
|
|
123,797 |
|
|
|
67,928 |
|
Inventory, net |
|
|
191,489 |
|
|
|
81,323 |
|
Prepaid expenses and other current assets |
|
|
53,608 |
|
|
|
33,296 |
|
Total current assets |
|
|
477,077 |
|
|
|
303,325 |
|
Property and equipment, net |
|
|
13,974 |
|
|
|
7,874 |
|
Intangible assets, net |
|
|
225,094 |
|
|
|
78,041 |
|
|
|
|
340,600 |
|
|
|
171,620 |
|
Other assets |
|
|
72,502 |
|
|
|
34,741 |
|
Total assets |
|
$ |
1,129,247 |
|
|
$ |
595,601 |
|
|
|
|
|
|
||||
Liabilities and stockholders' equity |
|
|
|
|
||||
Current liabilities: |
|
|
|
|
||||
Current portion of long-term debt and capital lease obligations |
|
$ |
100,307 |
|
|
$ |
5,575 |
|
Accounts payable |
|
|
81,075 |
|
|
|
31,427 |
|
Accrued expenses and other current liabilities |
|
|
117,733 |
|
|
|
70,974 |
|
Total current liabilities |
|
|
299,115 |
|
|
|
107,976 |
|
Long-term debt and finance lease obligations |
|
|
161,819 |
|
|
|
60,881 |
|
Deferred tax liabilities |
|
|
3,666 |
|
|
|
3,742 |
|
Long-term operating lease obligations |
|
|
21,459 |
|
|
|
11,201 |
|
Other long-term liabilities |
|
|
616 |
|
|
|
784 |
|
Total liabilities |
|
|
486,675 |
|
|
|
184,584 |
|
|
|
|
|
|
||||
Stockholders' equity: |
|
|
|
|
||||
Common stock, par value of |
|
|
555 |
|
|
|
535 |
|
Additional paid-in capital |
|
|
936,403 |
|
|
|
832,481 |
|
Accumulated other comprehensive loss |
|
|
(50 |
) |
|
|
— |
|
Accumulated deficit |
|
|
(294,336 |
) |
|
|
(421,999 |
) |
Total stockholders' equity |
|
|
642,572 |
|
|
|
411,017 |
|
Total liabilities and stockholders' equity |
|
$ |
1,129,247 |
|
|
$ |
595,601 |
|
|
||||||||
Condensed consolidated statements of cash flows |
||||||||
(unaudited) |
||||||||
(in thousands) |
||||||||
|
|
Twelve months ended |
||||||
|
|
2024 |
|
2023 |
||||
Cash flows from operating activities: |
|
|
|
|
||||
Net income |
|
$ |
127,663 |
|
|
$ |
61,530 |
|
Adjustments to reconcile net income to net cash provided by operating activities: |
|
|
|
|
||||
Depreciation and amortization |
|
|
35,913 |
|
|
|
22,164 |
|
Stock-based compensation expense |
|
|
40,625 |
|
|
|
29,117 |
|
Amortization of debt issuance costs and discount on debt |
|
|
430 |
|
|
|
346 |
|
Deferred income taxes |
|
|
(3,276 |
) |
|
|
(6,401 |
) |
Impairment of equity investment |
|
|
2,875 |
|
|
|
— |
|
Acquisition-related seller expenses |
|
|
(10,549 |
) |
|
|
— |
|
Loss on extinguishment of debt |
|
|
— |
|
|
|
176 |
|
Other, net |
|
|
1,227 |
|
|
|
179 |
|
Changes in operating assets and liabilities: |
|
|
|
|
||||
Accounts receivable |
|
|
(49,598 |
) |
|
|
(22,432 |
) |
Inventory |
|
|
(93,930 |
) |
|
|
3,174 |
|
Prepaid expenses and other assets |
|
|
(55,182 |
) |
|
|
(24,553 |
) |
Accounts payable and accrued expenses |
|
|
81,215 |
|
|
|
42,995 |
|
Other liabilities |
|
|
(6,259 |
) |
|
|
(4,412 |
) |
Net cash provided by operating activities |
|
|
71,154 |
|
|
|
101,883 |
|
|
|
|
|
|
||||
Cash flows from investing activities: |
|
|
|
|
||||
Acquisition, net of cash acquired |
|
|
(274,973 |
) |
|
|
— |
|
Purchase of property and equipment |
|
|
(8,659 |
) |
|
|
(1,723 |
) |
Investment contributions |
|
|
(1,028 |
) |
|
|
— |
|
Net cash used in investing activities |
|
|
(284,660 |
) |
|
|
(1,723 |
) |
|
|
|
|
|
||||
Cash flows from financing activities: |
|
|
|
|
||||
Proceeds from revolving line of credit |
|
|
89,500 |
|
|
|
— |
|
Proceeds from long-term debt |
|
|
115,000 |
|
|
|
— |
|
Repayment of long-term debt |
|
|
(7,875 |
) |
|
|
(30,000 |
) |
Debt issuance costs paid |
|
|
(665 |
) |
|
|
— |
|
Cash received from issuance of common stock |
|
|
5,561 |
|
|
|
8,053 |
|
Other, net |
|
|
(576 |
) |
|
|
(788 |
) |
Net cash provided by (used in) financing activities |
|
|
200,945 |
|
|
|
(22,735 |
) |
|
|
|
|
|
||||
Effect of exchange rate changes on cash and cash equivalents |
|
|
(34 |
) |
|
|
— |
|
|
|
|
|
|
||||
Net (decrease) increase in cash and cash equivalents |
|
|
(12,595 |
) |
|
|
77,425 |
|
Cash and cash equivalents - beginning of period |
|
|
120,778 |
|
|
|
43,353 |
|
Cash and cash equivalents - end of period |
|
$ |
108,183 |
|
|
$ |
120,778 |
|
|
||||||||||||||
Reconciliation of GAAP net income to non-GAAP adjusted EBITDA |
||||||||||||||
(unaudited) |
||||||||||||||
(in thousands) |
||||||||||||||
|
|
Three months ended |
|
Twelve months ended |
||||||||||
|
|
2024 |
|
2023 |
|
2024 |
|
2023 |
||||||
|
|
|
|
|
|
|
|
|
||||||
Net income |
|
$ |
14,527 |
|
|
$ |
16,246 |
|
|
$ |
127,663 |
|
$ |
61,530 |
Interest expense, net |
|
|
4,002 |
|
|
|
106 |
|
|
|
7,023 |
|
|
2,018 |
Income tax (benefit) provision |
|
|
(3,346 |
) |
|
|
(7,987 |
) |
|
|
13,327 |
|
|
2,544 |
Depreciation and amortization |
|
|
9,722 |
|
|
|
4,617 |
|
|
|
30,167 |
|
|
18,016 |
EBITDA |
|
$ |
24,905 |
|
|
$ |
12,982 |
|
|
$ |
178,180 |
|
$ |
84,108 |
Stock-based compensation |
|
|
11,166 |
|
|
|
7,284 |
|
|
|
40,625 |
|
|
29,117 |
Impairment of equity investment (a) |
|
|
1,155 |
|
|
|
— |
|
|
|
2,875 |
|
|
— |
Loss on extinguishment of debt (b) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
176 |
Other non-cash and non-recurring items (c) |
|
|
3,704 |
|
|
|
977 |
|
|
|
13,061 |
|
|
3,380 |
Adjusted EBITDA |
|
$ |
40,930 |
|
|
$ |
21,243 |
|
|
$ |
234,741 |
|
$ |
116,781 |
(a) |
Represents an impairment of equity investment recorded during the three and twelve months ended |
(b) |
Loss on extinguishment of debt includes the write-off of existing debt issuance costs and certain fees paid related to the amended credit agreement. |
(c) |
Represents other non-cash or non-recurring items, which include amortization of internal-use software costs related to cloud applications, costs related to the acquisition of Naturium, and cloud computing ERP implementation costs. |
|
||||||||||||||||
Reconciliation of GAAP SG&A to non-GAAP adjusted SG&A |
||||||||||||||||
(unaudited) |
||||||||||||||||
(in thousands) |
||||||||||||||||
|
|
Three months ended |
|
Twelve months ended |
||||||||||||
|
|
2024 |
|
2023 |
|
2024 |
|
2023 |
||||||||
Selling, general, and administrative expenses |
|
$ |
210,172 |
|
|
$ |
121,081 |
|
|
$ |
574,418 |
|
|
$ |
322,253 |
|
Stock-based compensation |
|
|
(11,145 |
) |
|
|
(7,195 |
) |
|
|
(40,609 |
) |
|
|
(29,005 |
) |
Other non-recurring items (a) |
|
|
(2,134 |
) |
|
|
— |
|
|
|
(7,401 |
) |
|
|
— |
|
Adjusted selling, general, and administrative expenses |
|
$ |
196,893 |
|
|
$ |
113,886 |
|
|
$ |
526,408 |
|
|
$ |
293,248 |
|
(a) |
Represents non-recurring cloud computing ERP implementation costs and costs related to the acquisition of Naturium. |
|
||||||||||||||||
Reconciliation of GAAP net income to non-GAAP adjusted net income |
||||||||||||||||
(unaudited) |
||||||||||||||||
(in thousands, except share and per share data) |
||||||||||||||||
|
|
Three months ended |
|
Twelve months ended |
||||||||||||
|
|
2024 |
|
2023 |
|
2024 |
|
2023 |
||||||||
Net income |
|
$ |
14,527 |
|
|
$ |
16,246 |
|
|
$ |
127,663 |
|
|
$ |
61,530 |
|
Stock-based compensation |
|
|
11,166 |
|
|
|
7,284 |
|
|
|
40,625 |
|
|
|
29,117 |
|
Other non-recurring items (a) |
|
|
2,444 |
|
|
|
— |
|
|
|
8,041 |
|
|
|
— |
|
Impairment of equity investment (b) |
|
|
1,155 |
|
|
|
— |
|
|
|
2,875 |
|
|
|
— |
|
Loss on extinguishment of debt (c) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
176 |
|
Amortization of acquired intangible assets (d) |
|
|
4,864 |
|
|
|
2,029 |
|
|
|
15,047 |
|
|
|
8,122 |
|
Tax Impact (e) |
|
|
(3,311 |
) |
|
|
(1,730 |
) |
|
|
(10,485 |
) |
|
|
(7,132 |
) |
Adjusted net income |
|
$ |
30,845 |
|
|
$ |
23,829 |
|
|
$ |
183,766 |
|
|
$ |
91,813 |
|
|
|
|
|
|
|
|
|
|
||||||||
Weighted average number of shares outstanding - diluted |
|
|
58,487,557 |
|
|
|
56,641,510 |
|
|
|
57,788,454 |
|
|
|
55,337,554 |
|
Adjusted diluted earnings per share |
|
$ |
0.53 |
|
|
$ |
0.42 |
|
|
$ |
3.18 |
|
|
$ |
1.66 |
|
(a) |
Represents non-recurring cloud computing ERP implementation costs and costs related to the acquisition of Naturium. |
(b) |
Represents an impairment of equity investment recorded during the three and twelve months ended |
(c) |
Loss on extinguishment of debt includes the write-off of existing debt issuance costs and certain fees paid related to the amended credit agreement. |
(d) |
Represents amortization expense of acquired intangible assets consisting of customer relationships and trademarks. |
(e) |
Represents the tax impact of the above adjustments. |
View source version on businesswire.com: https://www.businesswire.com/news/home/20240522668059/en/
Investors:
KC Katten
VP, Corporate Development & Investor Relations,
kkatten@elfbeauty.com
Media:
Head of Corporate Communications,
mfried@elfbeauty.com
Source: