Elf beauty The profits fell 30% in their first fiscal quarter, since the new tariffs on Chinese imports begin to affect the final result of the cosmetic company.
In the three months that ended on June 30, Elf's net income fell to $ 33.3 million, 30% less than $ 47.6 million a year. The company, which obtains about 75% of its products from China, also refused to provide an income guide throughout the year, citing the “wide range of potential results” related to new tasks.
Instead, the company only issued guidance for the first half of the fiscal year. ELF said that the growth of sales is exceeding 9% in the first half of the year and adjusted profits before interest, taxes, depreciation and amortization, or Ebitda, the margins will be 20%, compared to 23% in the first half of the previous fiscal year.
“We are operating in a very volatile macro environment, obviously a great uncertainty about tariffs, so until we have a greater resolution on how the tariff image is seen, we do not think it made sense to emit guidance,” said CEO Tarang Amin A CNBC in an interview. “It is the uncertainty about rates that hinders things.”
The company has already increased prices by $ 1 to compensate for the costs of the rate and is working to expand its business outside the USA and diversify its supply chain.
“We have 55% of tariffs on goods that come from China, and we have planned against that,” said Amin. “So I am waiting for that other shoe to go to see well, where do they really settle? I never thought I would see a day that I am happy to see 55% of the tariffs, but it is much better than 170%, so I think that once we have that resolution, we will be in a better place.”
Beyond the profits, ELF exceeded expectations in the upper and lower lines.
This is how the cosmetics company worked compared to what Wall Street was anticipating, based on a LSEG analysts survey:
- Profit per action: 89 tight cents compared to 84 expected cents
- Revenue: $ 354 million compared to $ 350 million
The company's net income for the company for the three -month period that ended on June 30 was $ 33.3 million, or 58 cents per share, compared to $ 47.6 million, or 81 cents per share, a year earlier. Excluding unique articles related to compensation based on shares and other non -recurring positions, ELF saw a tight net income of $ 51.3 million, or 89 cents per share.
Sales increased to $ 354 million, 9% more than $ 324 million the previous year. That marks the second consecutive trimester in which income growth slowed to individual digits, a pattern that the company has not seen since 2020.
In the last four years, ELF sales have constantly grown in the high two digits, but that impulse has begun to decrease as the beauty category in general cools after several years of overloaded growth.
Amin said that growth is expected to improve in the current quarter. He pointed out that the growth of sales of 9% of the quarter is at the top of the 50% growth in the period of the previous year, but recognized the category in general, and the state of consumer spending has been soft.
“Sometimes people forget how much we have been growing,” Amin said. “The category, the state of the consumer, is still challenged. There is a lot of uncertainty with tariffs, inflation.”
While the first fiscal quarter was slower than the rooms, Amin said that Nielsen's data shows that the company is still taking market share and overcoming the general category.
A key aspect of the company's growth comes from Buzzy products launches, which are often “deception” of prestigious products with the highest price. Recently he launched its brilliant Ferulic serum icon of vitamin C + e at $ 17, which is believed to be inspired by a similar product of Skinceuticals, which is sold for $ 185.
He also launched a new sunscreen and has just closed in his acquisition of the beauty brand of Hailey Bieber, Rhode, which will be launched in all Sephora stores in the United States and Canada in September. The effect that Rhode will have on the sales of Elf, and especially in its launch in Sephora, will not be seen in its results until the end of this year.
