Connect with us

Bussiness

E.l.f.’s success is due to a mix of ‘prestige and value’: CEO

Published

on

E.l.f.’s success is due to a mix of ‘prestige and value’: CEO

E.l.f. Beauty (ELF) is on an impressive growth trajectory, surpassing $1 billion in sales for the first time ever in a fiscal year and reporting a fourth quarter earnings beat. Chairman and CEO of the beauty powerhouse Tarang Amin joins Asking for a Trend to discuss this remarkable achievement.

Amin attributes the company’s growth to a combination of factors: “Consistency, leading growth, and the white space we see ahead of us.” He notes that the company’s sustained momentum, coupled with its ability to continue innovating, is something “investors can appreciate.”

On the beauty company’s price point, Amin says, “Value is one of the things we’re most known for.” In an era where consumers are under pressure due to high inflation, the company’s ability to offer “prestige-like quality at these extraordinary price points” is resonating well with customers, Amin adds.

Regarding international expansion, Amin notes that Canada and the UK have shown substantial growth for the company’s margins. E.l.f. has also ventured into Italy and the Netherlands: “There’s pent-up demand in these countries before e.l.f. gets there,” Amin says.

“The real insight here is you used to have to pick. You’d either do prestige brands, but it’ll cost you a lot of money, or you went to value,” Amin says.

For more expert insight and the latest market action, click here to watch this full episode of Asking for a Trend.

This post was written by Angel Smith

Video Transcript

Beauty crossing over 1 billion in sales for the first time ever in its fiscal 2024 continuing trend of rapid growth, the cosmetic brands fourth quarter revenue and profits surpassing Wall Street forecast.

Though a less ambitious outlook for revenue in the upcoming years sparked fears of the consumer slowdown could be around the corner.

Here to discuss is Tang Amin Elf, beauty chairman and Ceo Turang.

It is good to see you.

So you report your Q four results be investors like what they heard, Tang your tax surges almost 20% in today’s trade.

Let’s start there, Tang walk us through what drove the business in the quarter.

Well, I think it’s a combination of our exceptional consistent category leading growth and the consistency.

It’s our 21st first consecutive quarter of net sales and market share growth.

We finished the year our fiscal year at 77% growth in net sales over 100% growth and adjusted EBITA and we picked up 300 basis points of market share.

So I think it’s a combination of that consistency and leading growth as well as the white space.

We still see ahead of us we feel we can double our share in color Cosmetics.

We have two of the fastest growing skin brands in skin care and we have major white space opportunity internationally.

So I think the combination of two things is what inspect investors are appreciating.

Hey, Terran, it’s Julie here.

How much of your continuing success also has to do with the price point at which you sell your products, which is below uh many other competitors.

And what does that say about where the consumer is right now?

Well, I’d say definitely value is one of the things we’re most known for our ability to make, take the best of beauty and make it accessible to every eyelid and face.

We have a unique ability of having prestige, like quality of these extraordinary price points and that certainly is resonating now, but it’s resonated throughout the 21 quarters.

I’m talking about whether the pandemic or the category is strong or container imbalances.

It doesn’t really matter.

Uh Our community is responding to our value proposition, our powerhouse innovation and our marketing engine that knows how to engage and entertain our community.

And Tang, you mentioned the opportunity you see overseas internationally, where exactly Tarana nationally.

Uh do you see the most opportunity, what, what looks especially attractive here?

Well, you know, in the last quarter, we grew our international business 100 and 15%.

Primarily it was from the first two countries we entered Canada and the UK where we continue to increase our rank as we think of international expansion, first priorities on Western Europe.

A few months ago, we entered Douglas Italy.

We quickly became their number one brand.

Last month we entered Ethos in the Netherlands quickly became their number one brand.

What we’re seeing is there’s pent up demand in these countries before Elf gets there, primarily given the strength we have in social, in the US.

Consumers know about Elf.

Well, before we’re there and we’re definitely seeing that in terms of how much the brand resonates.

I also want to ask you about the so called lipstick index, right?

This thinking that even if economic growth slows that people are willing to spend on little luxuries like lipstick.

Now in that situation, how do you guys do?

I mean, is there a risk that people actually would if they’re not spending on more expensive items, maybe that they would trade up when it comes to their makeup or what have you seen?

Well, we’ve seen uh strong growth across the board with prestige as well as the mass side.

And so that effect is it is a small luxury that is so important to be able to express yourself.

The great news for Elf is we’ve seen strong growth with the economy was bad or the economy was good.

And I think the real insight here is uh you used to have to pick, you’d either do prestige brands, but it cost you a lot of money or you had kind of value uh the best, what else really offers is that prestige quality, these incredible value equation.

So uh consumers are telling us, you know, Elf is actually better than prestige.

So why am I spending so much more when I can get Elf and, and, and, and these incredible products that we have?

Tang, I want to switch gears a little bit because you guys started a bit of an unusual marketing campaign recently where you were pushing for more board diversity with a very catchy tagline among others.

Too many dicks, meaning too many Richards, white men named Richard, perhaps on a corporate boards and talked about needing more board diversity.

You know, right now, we are seeing a lot of companies sort of lean back from pushing these kinds of initiatives.

Why did you guys decide to go and go, you know, pretty provocatively in that direction?

Well, it’s something we really believe.

And if you look at our success, yes, we just talked about how great our products are the value equation, our innovation, our marketing pro probably the biggest driver.

Our success is our team and our culture.

And we’re very intentional in terms of how diverse our team is.

75% women, 65% Gen Z and millennial, 45% diverse.

We feel our, I mean, our employees are the community that we serve.

We feel it gives us a leg up and it’s not just our employees, we’re one of only four uh corporate boards in America, out of 4200 that have two thirds women and one third diverse representation.

We feel it’s been a major driver of our success and we wanted to do our part, not only the right thing to do, but also as good corporate citizens to shine a light on.

Uh And, and the tagline is so many dicks, not enough of everyone else.

And by the way, there’s nothing wrong with being Richard Rick Dick.

You guys have one on your board, right?

We do.

And he’s a phenomenal board member.

So this has less to do with not wanting them.

It’s more to do with, you know, the uh Richard Rick Dick.

I think there are twice as many as Hispanic women directors in the US, uh almost as many as black directors in the US.

So it’s more about really encouraging and shining a light of including others.

And we’ve seen that to be a major benefit for us and we want to do our part and make sure that others know that they can call us.

Uh We, we’re also partnering with the National association of corporate directors to sponsor 20 women and diverse candidates for their accelerate program to be able to get them and, and we really want, it’s, it’s part of what we really believe.

We, we serve a diverse community and it’s important that our community actually really appreciated this campaign that, you know, you’re standing up for something that a lot of companies don’t stand up for.

Uh but it’s, it’s core to our values and our purpose, Tang.

Thanks so much for joining the show today.

Appreciate it.

And thank you Julie as well.

Continue Reading