e.l.f. Beauty Announces Fourth Quarter and Full Fiscal 2025 Results

Business Wire

5 days ago

OAKLAND, Calif.--(BUSINESS WIRE)--e.l.f. Beauty (NYSE: ELF) today announced results for the three and twelve months ended March 31, 2025.
'In this dynamic environment, we continue to deliver industry-leading results. In Fiscal 2025, we grew net sales 28%, gained 190 basis points of market share in the U.S. and continued our international expansion strategy,' said Tarang Amin, e.l.f. Beauty's Chairman and Chief Executive Officer. 'We believe we have the right strategy to drive continued category-leading sales and market share growth in the years to come, and believe the acquisition of rhode will further strengthen and diversify our portfolio of fast-growing disruptive brands.'
Fourth Quarter Fiscal 2025 Review
For the three months ended March 31, 2025, compared to the three months ended March 31, 2024:
Net sales increased 4% to $332.6 million, primarily driven by strength across our retailer and e-commerce channels, as well as geographically across our U.S. and international markets.
Gross margin increased approximately 50 basis points to 71%, primarily driven by favorable foreign exchange impacts on goods purchased from China and lower transportation costs.
Selling, general and administrative ('SG&A') expenses decreased $17.4 million to $192.7 million, or 58% of net sales. Adjusted SG&A (SG&A excluding the items identified in the reconciliation table below) was $173.3 million, or 52% of net sales. The decrease in SG&A dollars was primarily due to a decrease in marketing and digital spend.
Net income was $28.3 million on a GAAP basis. Adjusted net income (net income excluding the items identified in the reconciliation table below) was $45.2 million.
Diluted earnings per share were $0.49 on a GAAP basis. Adjusted diluted earnings per share (diluted earnings per share calculated with adjusted net income excluding the items identified in the reconciliation table below) were $0.78.
Adjusted EBITDA (EBITDA excluding the items identified in the reconciliation table below) was $81.4 million, or 24% of net sales, up 99% year over year.
Full Year Fiscal 2025 Review
For the twelve months ended March 31, 2025, compared to the twelve months ended March 31, 2024:
Net sales increased 28% to $1,313.5 million, primarily driven by strength across our retailer and e-commerce channels, as well as geographically across our U.S. and international markets.
Gross margin increased approximately 50 basis points to 71%, primarily driven by favorable foreign exchange impacts on goods purchased from China and cost savings, partially offset by mix.
SG&A increased $203.2 million to $777.7 million, or 59% of net sales. Adjusted SG&A was $690.9 million, or 53% of net sales. The increase in SG&A dollars was primarily due to an increase in marketing and digital spend, compensation and benefits, operations costs, retail fixturing and visual merchandising costs, professional fees and depreciation and amortization.
Net income was $112.1 million on a GAAP basis. Adjusted net income was $197.6 million.
Diluted earnings per share were $1.92 on a GAAP basis. Adjusted diluted earnings per share were $3.39.
Adjusted EBITDA was $296.8 million, or 23% of net sales, up 26% year over year.
Liquidity
The Company ended fiscal 2025 with $148.7 million in cash and cash equivalents and $256.7 million of total debt outstanding, as compared to $108.2 million in cash and cash equivalents and $262.1 million of total debt outstanding at the end of fiscal 2024.
Fiscal 2026 Outlook
Due to the wide range of potential outcomes related to tariffs, the Company is not providing a Fiscal 2026 financial outlook at this time.
Entered Definitive Agreement to Acquire rhode
On May 28, 2025, the Company entered into a definitive agreement to acquire rhode, a fast-growing, multi-category lifestyle beauty brand founded by Hailey Bieber and known for its collection of high-performance, skin-focused products. The deal is comprised of $800.0 million at closing, subject to customary adjustments, in a combination of $600.0 million of cash and $200.0 million of stock, and potential earnout consideration of up to $200.0 million based on the future growth of the brand over a three-year timeframe. The transaction is subject to customary closing conditions, including regulatory approvals, and is expected to close in the second quarter of Fiscal 2026.
The company has provided additional details regarding this transaction in a separate press release, and management will discuss the transaction on today's webcast.
Webcast Details
The Company will hold a webcast to discuss its fourth quarter and Fiscal 2025 results and acquisition announcement today, May 28, 2025, at 4:30 p.m. Eastern Time. The webcast will be broadcast live at https://investor.elfbeauty.com/stock-and-financial/events-and-presentations. For those unable to listen to the live broadcast, an archived version will be available at the same location.
About e.l.f. Beauty
e.l.f. Beauty (NYSE: ELF) is fueled by a belief that anything is e.l.f.ing possible. e.l.f. is a different kind of company that disrupts norms, shapes culture and connects communities, through positivity, inclusivity and accessibility. The mission is clear: to make the best of beauty accessible to every eye, lip and face. e.l.f. Beauty and its brands, e.l.f. Cosmetics, e.l.f. SKIN, Keys Soulcare, Well People and Naturium, are led by purpose, driven by results and elevated by superpowers. e.l.f. Beauty offers e.l.f. clean and vegan products, all double-certified by PETA and Leaping Bunny as cruelty free, and proudly stands as the first beauty company with Fair Trade Certified™ facilities. With a kind heart at the center of e.l.f.'s ethos, the company donates 2% of net profits to organizations that make positive impacts.
Learn more at https://www.elfbeauty.com/.
Note Regarding non-GAAP Financial Measures
This press release includes references to non-GAAP measures, including adjusted EBITDA, adjusted SG&A, adjusted net income and adjusted diluted earnings per share. The Company presents these non-GAAP measures because its management uses them as supplemental measures in assessing its operating performance, and believes they are helpful to investors, securities analysts and other interested parties in evaluating the Company's performance. The non-GAAP measures included in this press release are not measurements of financial performance under GAAP and they should not be considered as alternatives to or substitutes for measures of performance derived in accordance with GAAP. In addition, these non-GAAP measures should not be construed as an inference that the Company's future results will be unaffected by unusual or non-recurring items. These non-GAAP measures have limitations as analytical tools, and you should not consider such measures either in isolation or as substitutes for analyzing the Company's results as reported under GAAP. The Company's definitions and calculations of these non-GAAP measures are not necessarily comparable to other similarly titled measures used by other companies due to different methods of calculation.
Adjusted EBITDA excludes expense or income related to stock-based compensation, impairment of equity investment, and other non-cash and non-recurring items. Such other non-cash or non-recurring items include amortization of internal-use software costs related to cloud applications, acquisition related costs, and cloud computing ERP implementation costs.
Adjusted SG&A excludes expense related to stock-based compensation and other non-recurring items. Such other non-recurring items include other non-recurring cloud computing ERP implementation costs and acquisition related costs.
Adjusted effective tax rate is the tax rate when excluding the pre-tax impact of expense or income related to stock-based compensation, other non-cash and non-recurring items, impairment of equity investment, amortization of acquired intangible assets, as well as the related tax impact for these items, calculated utilizing the statutory rate for where the impact was incurred.
Adjusted net income excludes expense related to stock-based compensation, other non-recurring items, impairment of equity investment, amortization of acquired intangible assets and the tax impact of the foregoing adjustments. Such other non-recurring items include other non-recurring cloud computing ERP implementation costs and acquisition related costs.
Forward-looking Statements
This press release contains forward-looking statements within the meaning of the federal securities laws, including those statements that we believe we have the right strategy to drive continued category-leading sales and market share growth in the years to come, and believe the acquisition of rhode will further strengthen and diversify our portfolio of fast-growing disruptive brands. Although the Company believes that the expectations reflected in the forward-looking statements are reasonable, actual results and the timing of selected events may differ materially from those expectations. Factors that could cause actual results to differ materially from those in the forward looking statements include, among other things, the risks and uncertainties that are described in the Company's most recent Annual Report on Form 10-K, as updated from time to time in the Company's SEC filings, as well as the occurrence of any event, change or other circumstances that could give rise to the termination of the definitive agreement to acquire rhode; the possibility that various closing conditions for the acquisition may not be satisfied or waived; the possibility of a failure to obtain, delays in obtaining or adverse conditions contained in regulatory or other required approvals; the failure of the acquisition to close for any other reason; the amount of fees and expenses related to the acquisition; the ability to achieve projected financial results; the Company's ability to effectively compete with other beauty companies; the Company's ability to successfully introduce new products; the Company's ability to attract new retail customers and/or expand business with its existing retail customers; the Company's ability to optimize shelf space at its key retail customers; the loss of any of the Company's key retail customers or if the general business performance of its key retail customers declines; and the Company's ability to effectively manage its SG&A and other expenses. Potential investors are urged to consider these factors carefully in evaluating the forward-looking statements. These forward-looking statements speak only as of the date hereof. Except as required by law, the Company assumes no obligation to update or revise these forward-looking statements for any reason, even if new information becomes available in the future.
e.l.f. Beauty, Inc. and subsidiaries
Condensed consolidated balance sheets
(unaudited)
(in thousands, except share and per share data)
March 31, 2025
Assets
Current assets:
Cash and cash equivalents
$
148,692
$
108,183
Accounts receivable, net
126,010
123,797
Inventory, net
187,170
191,489
Prepaid expenses and other current assets
78,688
53,608
Total current assets
540,560
477,077
Property and equipment, net
28,787
13,974
Intangible assets, net
207,698
225,094
Goodwill
340,582
340,600
Other assets
130,548
72,502
Total assets
$
1,248,175
$
1,129,247
Liabilities and stockholders' equity
Current liabilities:
Current portion of long-term debt
$
—
$
100,307
Accounts payable
72,180
81,075
Accrued expenses and other current liabilities
104,876
117,733
Total current liabilities
177,056
299,115
Long-term debt
256,676
161,819
Deferred tax liabilities
3,812
3,666
Long-term operating lease obligations
48,721
21,459
Other long-term liabilities
1,055
616
Total liabilities
487,320
486,675
Stockholders' equity:
Common stock, par value of $0.01 per share; 250,000,000 shares authorized as of March 31, 2025 and March 31, 2024; 55,730,037 and 55,583,660 shares issued and outstanding as of March 31, 2025 and March 31, 2024, respectively
556
555
Additional paid-in capital
942,025
936,403
Accumulated other comprehensive income (loss)
521
(50
)
Accumulated deficit
(182,247
)
(294,336
)
Total stockholders' equity
760,855
642,572
Total liabilities and stockholders' equity
$
1,248,175
$
1,129,247
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e.l.f. Beauty, Inc. and subsidiaries
Condensed consolidated statements of cash flows
(unaudited)
(in thousands)
Twelve months ended March 31,
2025
2024
Cash flows from operating activities:
Net income
$
112,089
$
127,663
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization
44,115
30,167
Non-cash lease expense
9,740
5,746
Stock-based compensation expense
71,786
40,625
Amortization of debt issuance costs and discount on debt
545
430
Deferred income taxes
446
(3,276
)
Impairment of equity investment
—
2,875
Acquisition-related seller expenses
—
(10,549
)
Loss on extinguishment of debt
13
—
Other, net
136
1,227
Changes in operating assets and liabilities:
Accounts receivable
(2,742
)
(49,598
)
Inventory
4,874
(93,930
)
Prepaid expenses and other assets
(75,854
)
(55,182
)
Accounts payable and accrued expenses
(23,397
)
81,215
Other liabilities
(7,911
)
(6,259
)
Net cash provided by operating activities
133,840
71,154
Cash flows from investing activities:
Acquisition, net of cash acquired
—
(274,973
)
Purchase of property and equipment
(18,520
)
(8,659
)
Investment contributions
(577
)
(1,028
)
Net cash used in investing activities
(19,097
)
(284,660
)
Cash flows from financing activities:
Proceeds from revolving line of credit
—
89,500
Repayment of revolving line of credit
(89,500
)
—
Proceeds from long-term debt
256,676
115,000
Repayment of long-term debt
(173,376
)
(7,875
)
Debt issuance costs paid
(2,083
)
(665
)
Repurchase of common stock
(67,062
)
—
Cash received from issuance of stock options
953
5,561
Other, net
(57
)
(576
)
Net cash (used in) provided by financing activities
(74,449
)
200,945
Effect of exchange rate changes on cash and cash equivalents
215
(34
)
Net increase (decrease) in cash and cash equivalents
40,509
(12,595
)
Cash and cash equivalents - beginning of period
108,183
120,778
Cash and cash equivalents - end of period
$
148,692
$
108,183
Expand
e.l.f. Beauty, Inc. and subsidiaries
Reconciliation of GAAP net income to non-GAAP adjusted EBITDA
(unaudited)
(in thousands)
Three months ended March 31,
Twelve months ended March 31,
2025
2024
2025
2024
Net income
$
28,253
$
14,527
$
112,089
$
127,663
Interest expense, net
2,860
4,002
13,813
7,023
Income tax (benefit) provision
15,784
(3,346
)
33,406
13,327
Depreciation and amortization
13,216
9,722
44,115
30,167
EBITDA
$
60,113
$
24,905
$
203,423
$
178,180
Stock-based compensation
14,835
11,166
71,786
40,625
Impairment of equity investment (a)
—
1,155
—
2,875
Other non-cash and non-recurring items (b)
6,404
3,704
21,617
13,061
Loss on extinguishment of debt (c)
13
—
13
—
Adjusted EBITDA
$
81,365
$
40,930
$
296,839
$
234,741
Expand
(a)
Represents an impairment of equity investment recorded during the three and twelve months ended March 31, 2024.
(b)
Represents other non-cash or non-recurring items, which include amortization of internal-use software costs related to cloud applications, acquisition related costs, and cloud computing ERP implementation costs.
(c)
Loss on extinguishment of debt includes the write-off of existing debt issuance costs and certain fees paid related to the amended credit agreement.
Expand
(a)
Represents other non-recurring cloud computing ERP implementation costs and acquisition related costs.
Expand
e.l.f. Beauty, Inc. and subsidiaries
Reconciliation of GAAP net income to non-GAAP adjusted net income
(unaudited)
(in thousands, except share and per share data)
Three months ended March 31,
Twelve months ended March 31,
2025
2024
2025
2024
Net income
$
28,253
$
14,527
$
112,089
$
127,663
Stock-based compensation
14,835
11,166
71,786
40,625
Other non-recurring items (a)
4,563
2,444
15,029
8,041
Impairment of equity investment (b)
—
1,155
—
2,875
Loss on extinguishment of debt (c)
13
—
13
—
Amortization of acquired intangible assets (d)
4,350
4,864
17,397
15,047
Tax Impact (e)
(6,779
)
(3,311
)
(18,733
)
(10,485
)
Adjusted net income
$
45,235
$
30,845
$
197,581
$
183,766
Weighted average number of shares outstanding -
diluted
57,980,746
58,487,557
58,345,174
57,788,454
Expand
(a)
Represents other non-recurring cloud computing ERP implementation costs and acquisition related costs.
(b)
Represents an impairment of equity investment recorded during the three and twelve months ended March 31, 2024.
(c)
Loss on extinguishment of debt includes the write-off of existing debt issuance costs and certain fees paid related to the amended credit agreement.
(d)
Represents amortization expense of acquired intangible assets consisting of customer relationships and trademarks.
(e)
Represents the tax impact of the above adjustments.
Expand