So, we like the fact that they’re very distinct and complementary, yet both have tremendous growth potential. In terms of where we could continue to see both brands. We think there’s expansion potential for both brands. Naturium probably opens itself up to other more premium retail locations over time, but we feel really, really great about the business we have at Target, Amazon, Naturium.com, very excited about Shoppers Drug Mart. So you’ll see some overlap in terms of distribution with some differences that we haven’t disclosed yet. And then from a demographic standpoint on e.l.f. SKIN the last part of your question, we are seeing us pick up more consumers directly from skincare. I’d say in the early days of e.l.f. SKIN, e.l.f. SKIN buyer was primarily cosmetics buyer.
It was housed right next to e.l.f. Cosmetics. You definitely got people building their baskets on e.l.f. Cosmetics, particularly with some of the latest innovations, if I take a look at our Suntouchables line, our SPF line, both Woah Glow, some touchables, invisible, our spray. We’re picking up people directly from Prestige Skin, in that business and so I feel really good about the strategy, particularly on an innovation standpoint where we’ll continue to get e.l.f. consumers, but we’re increasingly picking up more directly from skin care.
Anna Lizzul: Great. Thanks so much.
Operator: Next question comes from Korinne Wolfmeyer with Piper Sandler. Please go ahead.
Korinne Wolfmeyer: Hey. Good afternoon. Thanks for taking the question, and congrats on a good quarter. First, I’d like to just clarify, what percent of the supply chain is currently outside of China, inclusive of Naturium. And then could you just touch on in terms of your marketing spend, how much are you allocating toward international versus domestic? And looking forward over the next couple of years, will that mix shift more toward international or how are you thinking about that going forward? Thank you.
Tarang Amin: Yeah. So, the supply chain is still primarily in China, Korinne. I’d say over 80% is still in China even with the inclusion of Naturium. That’s one of the things I think over time you’ll see a shift, given our diversification plans, and part of that diversification plans is also relying on some of our main suppliers in China to also look at other geographies. So we are able to leverage the tremendous both relationship expertise they have, our ability to work with them, as well as bring on new suppliers. So I feel really good about the progress that’s being made, under that.
Mandy Fields: In terms of marketing spend, Korinne, our approach is very consistent with looking at marketing spend as a percentage of net sales. And so that’s how we have approached, how we allocate our spend across the different businesses. Would we lean in a little bit more to international or skin care, some of the other growth vectors? Perhaps. But we also want to make sure that we stay balanced in our approach and make sure that we’re putting, a lot of the fuel behind e.l.f. Cosmetics.
Korinne Wolfmeyer: Great. Thank you.
Operator: The next question comes from Mark Astrachan with Stifel. Please go ahead.
Mark Astrachan: Thanks and afternoon everyone. I guess as the business continues to grow. I’m really thinking more on the non-skin side. How much of the growth is sort of existing users, you touched a little bit on the loyalty program. How much is new users? And I guess as you increase marketing spend, how does that dynamic play out, meaning are existing users increasing basket? Are you attracting new users? And, you know, maybe to sort of trying to get at just how somebody enters into the e.l.f. family, how the life cycle plays out, they buy more products over time. I presume that means that the beauty cabinet bag makeup kit, so to speak is increasing, in terms of what e.l.f. products are in there versus other categories. I presume some of those share gains are coming from mass, some are coming from prestige, but maybe just, you know, sort of holistically kind of think about the life cycle here and who you’re going after and how they stay in the ecosystem.
Tarang Amin: Yeah, Mark. So, I’ll talk about the evolution. I’d say in the early days, we really relied a lot on existing users to build their basket, particularly as we expanded into additional product categories expanded into skin. I think that was early strategy. Really in the last few years, particularly as we’ve been able to take up our marketing levels and hit additional targets. We’re seeing many more new users, and the great profile that we’re getting on the new users, we can measure this through our loyalty program is they’re demonstrating much of the same behavior of existing users. Once they get into the franchise, they start buying more, and you continue to build the overall basket and overall lifetime value on both existing as well as new users.
So we feel really good about that profile and particularly being able to bring in both new users as we go through. The other big characteristics I would say is the market share we, we report is really based on Nielsen. So that’s just on the math side, in terms of, like who we’re taking share from and how we continue to build. But one of the great characteristics of the business over the last few years is particularly as we’ve doubled down on our holy grail Innovation, these big innovation franchises that grow year after year is we’re starting to source a lot more also not only from prestige, but give access to consumers who previously didn’t have access to these categories before. We’ve used the example on our Putty primer. There was an inspiration from a prestige item.
We continue to track that prestige item. It’s grown double digits. But we sell nine times the number of units on our Putty primer. So we basically brought in millions of consumers who couldn’t afford a $56 Putty primer, but certainly can afford our $10 one. And so I’d say that’s the other big dynamic. We’re going to continue to pick up share just given the momentum we have, the way our strategy is working, but perhaps even the bigger long term opportunity is giving consumers access to categories they didn’t previously have access to.
Operator: This concludes our question-and-answer session. I would like to turn the conference back over to Tarang Amin for any closing remarks.
Tarang Amin: Well, thank you for joining us today, everyone. I’m so proud of our incredible team at e.l.f. Beauty for delivering another phenomenal quarter. Thank you every e.l.f. and e.l.f. partner for your passion and dedication or a vision of creating a different kind of beauty company. We look forward to seeing some of you at CAGNY in a few weeks, where we’ll be presenting for the first time and speaking to you in May when we’ll discuss our fourth quarter results and FY ’25 outlook. Thank you and be well.
Operator: The conference is now concluded. Thank you for attending today’s presentation. You may now disconnect.
