By Koyena Das, Neil J Kanatt and Arriana McLymore
Aug 5 (Reuters) - Elf Beauty raised annual sales and profit forecast on Wednesday, driven by its expansion push outside of the United States as American shoppers continued to rein in spending in the face of sticky inflation.
The company, which offers about 75% of its products at $10 or less, said strong demand for its affordable beauty, makeup and skincare products amid strained consumer spending boosted sales momentum.
"(Elf is) really just continuing
to highlight value for our consumers because it's very important, just given the inflationary pressures they're facing today," Chief Financial Officer Mandy Fields told Reuters.
The company, known for its "Sheer For It" blush tints, now aims to grow share in its largest international markets, the UK, Canada and Germany.
International expansion, Fields said, is a "big white space" for the company, with 20% of its sales outside the U.S., compared to competitors having more than 70%.
She said Rhode, which Elf bought last year, would be launching in 19 countries across Europe next month, while the Elf brand would be introduced in Brazil, both in partnership with makeup retail giant Sephora. Elf said it was also launching products in Boots in the UK.
Elf — short for eyes, lips and face — also lowered prices on 10% of its portfolio after testing its pricing strategy this quarter to see if it would drive volumes.
So far, the pricing is increasing "higher unit momentum," CEO Tarang Amin said on the post-earnings call. "We actually believe we can grow gross profit dollars over time through that pricing action."
Elf shares have risen about 14% so far this year, but were trading about 3% down in extended trading.
Elf expects fiscal 2027 net sales of $1.94 billion to $1.97 billion, compared with $1.84 billion to $1.87 billion forecast earlier.
It projected annual adjusted profit of $3.50 to $3.55 per share, compared with its prior expectation of $3.27 to $3.32.
Net sales jumped 36% to $479.4 million during the quarter ended June 30, beating analysts' average estimate of $429.5 million, according to data compiled by LSEG.
First-quarter adjusted profit per share of $1.75 also topped the estimate of 71 cents.
Elf, which launched haircare products during the quarter, reported a gross margin increase of 1,400 basis points, including a 1,050-basis-point benefit from tariff refunds.
(Reporting by Koyena Das, Neil J Kanatt in Bengaluru and Arriana McLymore in New York City; Editing by Shreya Biswas and Shilpi Majumdar)
