e.l.f. Beauty, Inc. (NYSE:ELF) Q2 2024 Earnings Call Transcript

Tarang Amin: Yes. Oliver, in terms of your first question, what will it take to get to #1 market share? It’s really replicating what we’ve been able to do at target. And if you look at our target business, we mentioned we’re close to a 19 share there, almost 600 basis points ahead of #2 maybe [indiscernible] in that market or in that channel that #1 position, we basically have done over the last few years here, and it’s been a combination of 3 things. One, they have dedicated much more space to e.l.f. than we see in other retailers. And we’re in the process of replicating some of those space gains and other retailers the level of disruption that ELF has in their stores. I mean, at any given point, I think we’re in about 4 or 5 different spots within a Target store.

And then third is the way we partner with — from a marketing and overall multifunctional point. And really, I have a lot of confidence that we can do those same things in other retailers. If I take a look at the progress we’ve made just in a few years within Ulta Beauty we’re already 1 of their top cosmetics brands. And that was even before they expanded the space that they most recently did in the fall. Walmart remains a huge opportunity, see progress there as well. And then drug, drug is still rolling out the brand. So I think over the next few years, as we get better presence in these retailers as we partner the way we have partnered with Target. I can see us get to that #1 share position over time. And then, by the way, Target is not standing still Target is 1 of our best retail and customers and the level of collaboration we have, they recently held a meeting at Target they instigated, which is how could e.l.f. become their first billion retail brand in Target.

And for perspective, we’re going to do about $400 million of retail sales and target this year. So I think it’s really encouraging sign when even your top customer is coming to you and figuring how could you more than double even within there. So a great deal of bullishness in terms of our market share. And then in terms of skin care, I think we’re seeing some of the same parallels that we saw with e.l.f. color. If I take a look at our skin care, we do have some real hero franchises. I take a look at our [indiscernible] Hydration franchise. And what we’ve been able to do there consistently build that franchise year after year. Our most recent franchise and touchables is off to an incredible start. The first 3 items in that franchise, we’re just seeing real resonance in.

So we’ll continue to map out the innovation that we have in both e.l.f. SKIN as well as the pipeline of Naturium is really quite rich. So I feel great about the products we have there. And then finally, in terms of international, I’d say what’s different from the past is, we have real proof points in both Canada and the U.K. and that consistent approach that I talked about in terms of how we were able to penetrate both those markets with leading retailers. In addition, we’re building out a very strong international team. So we opened up entity in the U.K. I think it was last year. We have a team there authority over 30 people that’s really focused on our international expansion. As I mentioned, Italy being 1 of the most best recent examples there.

So feel great on all 3 fronts in terms of our ability to continue to build market share and color. Obviously, the pipeline we have in skin care with really all 3 of our brands, e.l.f. SKIN, Naturium and Keys Soulcare. And then internationally, just tons of white space there relative to our global peers.

Operator: Our next question comes from Mark Astrachan with Stifel.