q3 fy 2021 earnings webcast february 3, 2021
TRANSCRIPT
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Q3 FY 2021 EARNINGS WEBCAST FEBRUARY 3, 2021
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As a reminder, this call contains forward-looking statements that are based on management’s expectations – including those relating to the category
trends and longer-term outlook – and are subject to known and unknown risks and uncertainties, and therefore, actual results may differ materially.
Important factors that may cause actual results to differ are detailed in today’s press release and the company’s SEC filings.
In addition, the company’s presentation today includes information presented on a non-GAAP basis. We refer you to today’s press release for
a reconciliation of the differences between the non-GAAP presentation and the most directly comparable GAAP measures.
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TARANG P. AMIN CHAIRMAN &
CHIEF EXECUTIVE OFFICER
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STRATEGIC FRAMEWORK
3
GROWTH OPPORTUNITIES
2
Q3 FY 2021 RESULTS
1
TODAY’S AGENDA
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+7%+7%
+11%
+16%
+8%
+3%
+8%
Q1 FY 20
Q2 FY 20
Q3 FY 20
Q4 FY 20
Q4 FY 19
Q1 FY 21
Q2 FY 21
NET SALES GROWTH BY QUARTER. FY 19 - FY 20 GROWTH RATES EXCLUDE E.L.F. STORES (CLOSED IN FEBRUARY 2019)
+10%
Q3 FY 21
EIGHT CONSECUTIVE QUARTERS OF NET SALES GROWTH
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GROWTH MARGIN21%+10%
$89MNET
SALESADJUSTED
EBITDA
$18M
Q3 FY 21 RESULTS
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PREMIUM QUALITY
CRUELTY FREE
UNIVERSAL APPEAL
OUR SUPERPOWERS
ACCESSIBLE PRICES
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DRIVE BRAND
DEMAND
DOUBLE DOWN
DIGITAL
COST SAVINGSINNOVATION
LEADING PRODUC-
TIVITY
EXECUTING ON OUR FIVE STRATEGIC IMPERATIVES
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DRIVE BRAND DEMAND
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SALES TREND - TOP 5 COLOR COSMETICS BRANDS
-40
-30
-20
-10
0
Maybelline L'Oreal Cover Girl Revlon e.l.f.
COVERGIRL -25%
MAYBELLINE -17%
REVLON -40%
E.L.F. -2%
L’OREAL -18%
NIELSEN XAOC LATEST 12 WEEKS ENDING 12/26/2020
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-300
-225
-150
-75
0
75
150
Revlon Cover Girl L'Oreal Maybelline e.l.f.
COVERGIRL -70
MAYBELLINE +50
E.L.F. +100
L’OREAL +10
REVLON -220
5.9%SHARE
E.L.F.
SHARE TREND (BPS) - TOP 5 COLOR COSMETICS BRANDS
NIELSEN XAOC LATEST 12 WEEKS ENDING 12/26/2020
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NEW
9MFOLLOWERS+11% GROWTH
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+16% EMV GROWTH
EMV
= E
ARN
ED M
EDIA
VA
LUE.
SO
URC
E: T
RIBE
DY
NA
MIC
S
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CONTINUING TO EXPLORE NEW FRONTIERS
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NEWSMAKER OF THE YEAR2020 NEWSMAKER
OF THE YEAR
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AD AGE TOP 10 MARKETERS
OF THE YEAR
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FIRST RITUAL LAUNCHED
IN DECEMBER
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COLLECTION EXPANDED IN JANUARY
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>10B PRESS IMPRESSIONS
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100M SOCIAL FOLLOWERS
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BRINGING THE BRAND RECHARGE TO LIFE
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DOUBLE DOWN ON DIGITAL
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~TRIPLE DIGIT
GROWTH
Q3 FY 21 YEAR-TO-DATE DIGITAL CONSUMPTION YEAR-OVER-YEAR GROWTH
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DIGITAL COMMERCE PENETRATION
Q3 FY 20 Q3 FY 21
10 % 16 %
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% OF NEW CONSUMERS PURCHASING ON ELFCOSMETICS.COM, FROM 10/1/2020 TO 12/31/2020
~60%NEW CONSUMERS
SHOPPING ELFCOSMETICS.COM
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GROWTH
~40%
MEMBERS2.3M
BEAUTY SQUAD LOYALTY MEMBERS AS OF 12/31/2020 | Q3 FY 21 GROWTH IN TOTAL ENROLLMENT VERSUS PY
OF SALES ON ELFCOSMETICS.COM
~70%
BEAUTY SQUAD LOYALTY PROGRAM
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BEAUTY SQUAD EARLY ACCESS
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CONTENT COMMUNITYCONVERSATION
THE UNIQUENESS OF KEYS SOULCARE
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INNOVATION
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STRENGTH IN CORE SEGMENTS
NIE
LSEN
XA
OC
LA
TEST
12
WEE
KS
END
ING
1
2/2
6/2
02
0,
EXC
LUD
ES P
RIVA
TE L
ABE
L
$ SHAREBRUSHES
#1$ SHAREPRIMERS
#1$ SHARE
CONCEALER
#2UNIT SHAREEYEBROW
#2$ SHARE
SPONGES
#2
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POWERHOUSE INNOVATION ENGINE
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Make this a Camo CC cream slide, maybe with some of our internal video showing what it is,
the benefits, and before/after, and also include some TikTok videos showing consumers
comparing it to the IT Cosmetics CC Cream
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CAMO CC CREAM $14 VS. A PRESTIGE EQUIVALENT $40
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+17%E.L.F.
SKINCARE CONSUMPTION
YOY CONSUMPTION GROWTH. NIELSEN XAOC LATEST 12 WEEKS ENDING 12/26/2020
-5%S K I N C A R E C AT E G O RY
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ELFCOSMETICS.COM AMAZON.COM
8% ~25%
TRACKED CHANNELS
SKINCARE PENETRATION
LATEST 12 WEEKS THROUGH DECEMBER 2020
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DERMATOLOGIST-DEVELOPED, CLEAN FORMULAS
DR. RENÉE SNYDER
SKIN-NOURISHING INGREDIENTS
SOUL-NURTURING RITUALSSOUL-NURTURING RITUALS
OFFERINGS THAT CARE FOR THE WHOLE SELF
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LEADING PRODUCTIVITY
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PROJECT UNICORN
ELEVATE BRAND PRESENTATION
3 PATENTS
BETTER DISPLAY
FIT MORE ITEMS ON SHELF
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ELIMINATED 650K LBS OF PACKAGING
LBS
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SHELF SPACE EXPANSION
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EXPANDED FALL 2020
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EXPANDING SPRING 2021
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EXPANDING SPRING 2021
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EXPANDING SPRING 2021
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29 COUNTRIES (ONLINE)
U.S. (ONLINE & IN STORES)
U.K. (ONLINE)
8 COUNTRIES (ONLINE & IN STORES)
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COST SAVINGS
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GROSS MARGIN
FY14 FY17 FY19
FY14–FY18 REPRESENT DECEMBER 31 YEAR END, FY19–FY20 REPRESENT MARCH 31 YEAR END
47%
64%
FY16FY15
52%
58%
61% 61% 61%
FY20FY18
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PRICING
SUPPLIER CONCESSIONS
SG&A LEVERAGE
MITIGATING FX IMPACT
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STRATEGIC FRAMEWORK
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EXC
LUS
IVE D
ISTR
IBU
TION
AC
CES
SIB
LE D
ISTR
IBU
TIO
NPRESTIGE PRICE
MASS PRICE~$5 AUR
~$20 AUR
~$20-40 AUR
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MOVING AT E.L.F. SPEED
CORE VALUE PROPOSITION
CONTINUE TO GAIN MARKET SHARE
DIGITAL STRENGTH
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MANDY FIELDS SENIOR VICE PRESIDENT & CHIEF FINANCIAL OFFICER
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FISCAL 2021 OUTLOOK
2
Q3 FY 2021 RESULTS
1
TODAY’S AGENDA
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$89 MILLION
+10%
Q3 FY 21 NET SALES
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Q3 FY 21 NET SALES DRIVERS
E-COMMERCE INTERNATIONAL NATIONAL RETAILERS
ORDER TIMING
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64% GROSS MARGIN
Q3 FY 21 RESULTS
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44%49%
ADJUSTED SG&A
Q3 FY 20 Q3 FY 21
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15%
MARKETING & DIGITAL INVESTMENT
Q3 FY 20 Q3 FY 21
12%
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$18M ADJUSTED EBITDA
21%MARGIN
Q3 FY 21 RESULTS
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Q3 FY 20
$12M
Q3 FY 21
$12M
ADJUSTED NET INCOME
$0.22
Q3 FY 21Q3 FY 20
$0.24
ADJUSTED EPS
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CASH ON HAND + REVOLVING CREDIT FACILITY
$85 MILLION
STRONG LIQUIDITY
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INVENTORY DRIVERS
NEW BRANDS
SPACE EXPANSION
FX
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INVESTING IN FIVE STRATEGIC
IMPERATIVES
KEYS SOULCARE LAUNCH
LL PEOPLE BRAND
RECHARGE
EW
CASH PRIORITIES
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RAISED FISCAL 2021 GUIDANCE
ADJUSTED EBITDA $59M TO $60M
ADJUSTED EPS $0.63 TO $0.64
NET SALES +7% TO 9%
ADJUSTED NET INCOME $33M TO $34M
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Q4 NET SALES DRIVERS
MACRO VOLATILITY
TOUGHER COMPS
MERCHANDISING
BUSINESS MOMENTUM
STIMULUS
ORDER TIMING
KEYS SOULCARE
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FY 2021 GUIDANCE
$59MTO
$60M
ADJUSTED EBITDA
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PRICE INCREASES
COST SAVINGS
SG&A LEVERAGE
MITIGATING FX IMPACT
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LONG-TERM ECONOMIC MODEL
MID TO HIGH SINGLE
DIGITS
NET SALES CAGR
OUTPACE SALES
GROWTH
ADJUSTED EBITDA CAGR
CAGR REPRESENTS EXPECTATIONS OVER A 3 YEAR TIME FRAME, THROUGH FY 2024
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INCLUSIVE. ACCESSIBLE. CRUELTY FREE.
![Page 78: Q3 FY 2021 EARNINGS WEBCAST FEBRUARY 3, 2021](https://reader031.vdocuments.us/reader031/viewer/2022030217/621e7559fe403723663987db/html5/thumbnails/78.jpg)
THANK YOU