By Anuja Bharat Mistry
(Reuters) -Elf Beauty raised its annual sales and profit forecast on Wednesday, banking on its efforts to sell cosmetics such as lip oil and liquid blush at affordable prices in the U.S. and abroad, sending the company’s shares higher. company rose 9% in extended terms. trade.
Customers, who have been looking for lower-priced makeup and skincare products, have helped boost Elf’s sales in a challenging market where major beauty brands such as Estee Lauder and L’Oreal have been struggling to increase sales. demand.
Elf expects net sales in the range of $1.32 billion to $1.34 billion, compared with its previous forecast of $1.28 billion to $1.30 billion.
The company’s strategy of introducing “copies” of luxury cosmetics and pricing its products between $2 and $10 has further fueled demand.
The California-based company has expanded its product offerings to mass retailers such as Walmart, Target and Amazon.com, helping it reach a broader customer base in the United States.
Elf is expanding into a subset of Dollar General stores in November, CEO Tarang Amin said in a post-earnings conference call, adding that it helps tap into a consumer base that only has access to a few legacy mass brands.
Net sales rose 40% to $301.1 million for the quarter ended Sept. 30, compared with average analyst estimates of $285.8 million, according to data compiled by LSEG.
On an adjusted basis, it earned a profit of 77 cents per share, beating analyst estimates of 43 cents per share.
It expects adjusted annual earnings per share of between $3.47 and $3.53, up from its previous range of $3.36 to $3.41.
Price increases in international markets such as India and Germany and cost-saving measures helped Elf increase its second-quarter gross margin by 40 basis points to 71%.
Elf has broad appeal across all income groups, Amin told Reuters, adding that the company’s “strategy is to have the highest quality at an affordable price or at an extraordinary price.”
(Reporting by Anuja Bharat Mistry in Bengaluru; Editing by Shailesh Kuber)