e.l.f Beauty's second quarter 2021 net sales totaled $72.4 million, a 7% increase from the $67.6 million reported in the three months ended Sept. 30, 2019.
Previously: Estée Lauder Q1 2021 Results Show 9% Net Sales Decrease
According to e.l.f., the increase was primarily driven by strength in digital, as well as growth internationally and within Nielsen-tracked channel customers (generally mass channels).
The gross margin increased 100 basis points to 65%, compared to 64% in the three months ended Sept. 30, 2019. The increase was primarily driven by a combination of margin-accretive product mix and cost savings, a favorable foreign exchange impact, and a shift in sales mix to elfcosmetics.com.
Results were partially offset by the impact of tariffs on goods imported from China and certain costs associated with space expansion and customer reset activity.
The reported net income was $0.4 million, or $0.01 per diluted share, as compared to net income of $6.5 million, or $0.13 per diluted share in the three months ended Sept. 30, 2019.
Six Months Results
In the six months ended Sept. 30, 2020, net sales increased 7% to $136.9 million from $127.4 million in the three months ended September 30, 2019. The increase was primarily driven by strength in digital, as well as growth internationally and within Nielsen tracked channel customers, according to e.l.f.
Gross margin increased 300 basis points to 66%, as compared to 63% in the six months ended September 30, 2019.
Net income was $2.0 million, or $0.04 per diluted share, compared to net income of $10.2 million, or $0.20 per diluted share, in the six months ended September 30, 2019.
Cash & Debt
As of September 30, 2020, the company had $41.0 million in cash and cash equivalents, compared to $58.7 million as of September 30, 2019. As of September 30, 2020, long-term debt totaled $118.6 million, compared to $132.4 million as of September 30, 2019.
Fiscal 2021 Outlook
e.l.f. Beauty is projecting $297-303 million net income for fiscal 2021, compared to $283 million in fiscal 2020. The company is also forecasting $31-33 million adjusted net income, essentially flat year-over-year.
Tarang Amin, e.l.f. Beauty's chairman and chief executive officer, said:
Our deep commitment to inclusive, accessible, and cruelty-free beauty continues to resonate with consumers. This is our seventh consecutive quarter of net sales growth. Of the top five color cosmetics brands in the U.S., e.l.f. was the only brand to post growth in the quarter, and the only brand to grow share, according to Nielsen. We also took important next steps in our transformation to a multi-brand portfolio with the unveiling of Keys Soulcare and the launch of our recharged W3LL PEOPLE brand.
We believe the focused work behind our strategic imperatives has set the foundation for long-term growth and provided a platform for our strategic extensions. While we expect the near-term operating environment to remain dynamic, I am confident in our ability to continue to execute our strategy and emerge with an even stronger, more diversified brand portfolio.