Post Earnings Coverage as e.l.f. Beauty’s Net Sales Jumped 15%; Adjusted Income Soared 40%

Upcoming AWS Coverage on Coty Post-Earnings Results

LONDON, UK / ACCESSWIRE / May 31, 2017 / Active Wall St. announces its post-earnings coverage on e.l.f. Beauty, Inc. (NYSE: ELF). The Company announced its first quarter fiscal 2017 financial results on May 10, 2017. The cosmetic Company surpassed top- and bottom-line expectations. Register with us now for your free membership at:

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One of e.l.f. Beauty’s competitors within the Personal Products space, Coty Inc. (NYSE: COTY), announced on May 10, 2017, its financial results for Q3 FY17 which ended on March 31, 2017. AWS will be initiating a research report on Coty in the coming days.

Today, AWS is promoting its earnings coverage on ELF; touching on COTY. Get our free coverage by signing up to:

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Earnings Reviewed

e.l.f. Beauty’s net sales increased 15% to $60.57 million for the three months ended March 31, 2017 compared to net sales of $52.67 million in Q1 2016, driven by sales growth across leading national retailers and the Company’s direct business. e.l.f. Beauty’s revenue numbers surpassed analysts’ consensus of $59.39 million.

For Q1 2017, e.l.f. Beauty’s gross margin expanded to 63% from 56% in Q1 2016, primarily as a result of margin accretive innovation coupled with improvements in freight costs and the benefit of foreign exchange rate movements. The Company’s selling, general, and administrative expenses (“SG&A”) increased to 54% of net sales compared to 44% of net sales in the prior year’s same quarter, primarily due to continued investment to support long-term growth. e.l.f. Beauty’s adjusted EBITDA was $11.7 million for the reported quarter compared to adjusted EBITDA of $11.6 million in the year earlier same quarter.

On a GAAP basis, e.l.f. Beauty’s net income was $2.2 million, or $0.04 per diluted share, based on a weighted-average share count of 49.5 million shares. This compared to a net loss attributable to common stockholders of $34.1 million, or $(69.57) per share, based on a weighted-average share count of 0.5 million shares in Q1 2016. e.l.f. Beauty’s adjusted net income increased 40% to $4.4 million, or $0.09 per diluted share, for the reported quarter compared to adjusted net income of $3.1 million, or $0.06 per diluted share, for the year ago corresponding period. The Company’s earnings outperformed Wall Street’s expectations of $0.05 per share.

“We are pleased to report a strong start to the year as e.l.f. grew net sales by 15%, expanded gross margin nearly 750 basis points, and made progress toward our mission to make luxurious beauty accessible for all,” stated Tarang Amin, the Company’s Chairman and Chief Executive Officer, “This performance is notable given the significant amount of shipments to customers for shelf resets in Q1 2016.”

Balance Sheet

At March 31, 2017, e.l.f. Beauty had $5.4 million in cash compared to $14.8 million as of March 31, 2016. The Company’s inventory at March 31, 2017, totaled $76.9 million versus $28.4 million on March 31, 2016. The y-o-y increase in inventory primarily reflected an increase of inventory in the Company’s fastest moving items. At March 31, 2017, e.l.f. Beauty’s long-term debt totaled $154.2 million compared to $136.8 million as of March 31, 2016.

Outlook

e.l.f. Beauty reaffirmed its outlook for 2017, with expectations for strong revenue growth and expansion in gross margin. The Company is forecasting net sales in the range of $285 million and $295 million and adjusted EBITDA in the band of $61 million and $64 million. e.l.f. Beauty is predicting adjusted net income to be between $21 million to $23 million, with EPS estimated in the range of $0.40 to $0.43 per share.

Stock Performance

At the close of trading session on Tuesday, May 30, 2017, e.l.f. Beauty’s stock price slightly fell 0.47% to end the day at $25.21. A total volume of 526.06 thousand shares were exchanged during the session. The stock currently has a market cap of $1.15 billion.

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