ELF Beauty gave a cautious outlook late Wednesday after earnings unexpectedly rose in its fiscal fourth quarter. ELF Beauty stock surged above a key level Thursday, after worries about a mass beauty slowdown hit shares hard in April.
Analysts at William Blair and Bank of America highlighted a "meaningful" Q4 sales beat, with both firms viewing guidance for fiscal 2025 as likely conservative, given disciplined management and strong sales quarter to date.
"Total sales growth (of 71%) was driven by volume (up 50%) and price/mix (higher by 21%) and was broad based across categories (cosmetics, skin care) and channels (national retailers and digital)," William Blair analyst Jon Andersen wrote in a note Thursday.
ELF Beauty Earnings
Estimates: Analysts expected ELF Beauty to report a 21% drop in earnings to 33 cents per share, according to FactSet. Revenue was seen growing 56%, year over year, to $292.6 million.
Results: ELF Beauty earnings jumped 26% to 53 cents per share, vs. expectations for a 21% decline. Sales vaulted 71%, year over year, to $321.1 million, the company said in an earnings release.
Outlook: The company forecast EPS of $3.20-$3.25 in fiscal 2025, rising from $3.18 in fiscal 2024. Analysts were expecting $3.56 and are now expecting $3.41, FactSet shows.
ELF Beauty guided revenue of $1.23 billion-$1.25 billion, also below views but up from $1.024 billion in fiscal 2024. ELF Beauty's fiscal year ends in March.
ELF Beauty Stock
Shares of the cosmetics company rocketed 18.8%, to 184.64, in big volume on the stock market today. ELF Beauty stock recovered the 50-day line for the first time since a broad beauty stock sell-off in April.
The beauty stock, which especially appeals to millennial and Gen Z customers, lost 2.1% on Wednesday. It undercut the 50-day line on April 3 after Ulta Beauty warned of slower growth.
The relative strength line also bolted higher Thursday after lagging since March. The RS line, the blue line in the chart shown, tracks ELF stock's performance vs. the S&P 500 index.
On Wednesday morning, Target sounded a reassuring note on beauty sales while issuing a glum earnings report.
The big-box retailer said shoppers bought beauty items but less of other discretionary items, such as apparel and home products. Both Target and Ulta Beauty stores stock ELF Beauty products.
Ulta Beauty is set to report earnings on May 30 after the market close.
