e.l.f. Beauty, Inc. (NYSE:ELF) Q3 2023 Earnings Call Transcript

Anna Lizzul: Hi, thank you and congratulations on the great results. Just given the benefits driven by price increases and product mix, I was wondering if you could share how much of the growth was driven by the expansion of e.l.f. SKIN with your added shelf space at major retailers? And then are you seeing an increase in older demographics purchasing e.l.f. SKIN outside of your more typical consumer in the millennial and Gen Z cohorts? And just overall in terms of the growth that you’re seeing, how much of the benefit would you allocate to innovation in your products? Thanks.

Mandy Fields: Yes. Hi, Anna. So, first, on the price increases and mix, we have talked about the price increases that we took last March and the benefit that, that’s had to our overall top-line is about high single-digit impact. So that’s kind of how you can size up the specific price increases that we took. Mix is playing a role in that, right? We’ve launched some innovation this year that is at that $10 or $12 range that is also playing a role. So, you’ll see in our commentary in the Q how price and volume €“ price/mix and volume breakout across both net sales and gross margin. I would say, this quarter, a pretty healthy mix of both, which we are very pleased to see. From a skin care standpoint, we talked on the call about skin care being up 34% for us in Q3.

Skin care consumption versus the category, up 6% and on the color side, seeing cosmetics up 36% versus the category up 8%. So very pleased with how our skin care is performing as well and certainly an opportunity for growth. Tarang just talked about our Whoa Glow. That will be a part of our shelf reset and a continued focus on making sure that skincare is a part of that shelf expansion as we go in. So we’re very pleased with that. And then if I think about innovation, overall, innovation is a healthy contributor to our sales growth and has been pretty consistent over these last several years. So we feel great about the innovation that’s coming. We highlighted the innovation in Mascara and lip and in skin care that we’re really excited about.

And so, as we think about balance of growth, really seeing it across all vectors from a channel standpoint, we talked about digital. We’ve talked about international and really pleased with the balance that we’re seeing as well, across kind of core products and innovation.

Anna Lizzul: Great. Thanks very much.

Operator: Our next question comes from Susan Anderson with Canaccord Genuity. Please go ahead.

Susan Anderson: Hi, thanks for taking my question. Great job on the quarter. I wanted to ask a little bit about marketing. I’m curious if there is any thoughts or color you can give around just the increase in marketing and how much you think that has helped to drive the accelerated sales growth? And then also, I am curious if you have any early thoughts about how you’re thinking about marketing for 2023 if this is going to be the new base level? Or do you think you’ll increase it again?