e.l.f. Beauty has posted Q2 2022 net sales growth of 27%, totaling $91.9 million, while gaining 30 basis points of market share per Nielsen, according to the brand. The company has updated its fiscal 2022 net sales outlook from $357-364 million to $364-370 million.
Gross margin for Q2 decreased by about 200 basis points to 63%, primarily driven by unfavorable foreign exchange rates, an increase in freight and shipping costs, and an increase in inventory adjustments. This was partly offset by price increases.
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Selling, general and administrative expenses increased $5.3 million to $50.4 million, or 55% of net sales. The increase was primarily due to investments in marketing and digital and increased operational costs, according to the brand.
Adjusted net income was $11.3 million. Adjusted EBITDA was $18.5 million, or 20% of net sales, up 29% year over year.
For the six months ended September 30, 2021, e.l.f. Beauty posted a net sales increase of 38%, totaling $188.9 million. Gross margin fell 260 basis points to 63.5%, primarily driven by unfavorable foreign exchange rates and elevated transportation costs, per the company.
Net income was $14.0 million on a GAAP basis. Adjusted net income was $25.6 million. Adjusted EBITDA was $40.2 million, or 21.3% of net sales, up 35% fro the same period of 2020.
As noted, the company updated its outlook for fiscal 2022, reflecting a 14-16% increase in net sales.
“I am proud of the e.l.f. Beauty team for delivering our 11th consecutive quarter of net sales growth,” said Tarang Amin, e.l.f. Beauty's chairman and CEO. “In the second quarter, e.l.f. grew sales 27% versus year ago and was again the only top five color cosmetics brand to grow market share above pre-pandemic levels, per Nielsen. Our performance demonstrates that our five strategic imperatives are driving results and we remain confident in the long-term growth potential for our portfolio of brands.”