Q1 FY 2021 EARNINGS WEBCAST AUGUST 5, 2020 - elf Cosmetics, Inc.
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Q1 FY 2021 EARNINGS WEBCAST AUGUST 5, 2020
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. Please note after the presentation there is a
separate dial-in for the QA session, also noted in the press release.
TARANG P. AMIN
CHAIRMAN &
CHIEF EXECUTIVE OFFICER
T O D AY ’ S A GE NDA
1 2 3
Q1 FY 2021 NEW LIFESTYLE STRATEGIC
RESULTS BEAUTY BRAND FRAMEWORK
S I X C ONS E C U T I V E Q U A R T E R S O F NE T SA LE S G RO WTH
+16%
+11%
+7% +8% +8%
+3%
Q4 FY 19 Q1 FY 20 Q2 FY 20 Q3 FY 20 Q4 FY 20 Q1 FY 21
NET SALES GROWTH BY QUARTER, EXCLUDES E.L.F. STORES
Q 1 F Y 2 1 N E T SA LE S
+8 %
$ 65
MILLION
Q 1 F Y 2 1 R ESU LTS
+ 500 +7 %
BPS
67 % $ 16 M
GROSS MARGIN ADJUSTED EBITDA
Q1 FY 2 1 S H AR E C H A N GE ( B P S ) - T O P 5 C O LO R C O SME TIC S BRA NDS
E.L.F. E . L . F.
+100
5.5%
SHARE
L’OREAL COVERGIRL
-190 -190 REVLON
MAYBELLINE -230
-250
NIELSEN XAOC L12 WEEKS ENDING 6/13/20
O U T P E R F O R M I N G C ATE G O RY TRE NDS
+13.0%
E.L.F. +2.5%
COLOR -3.8%
-11.7%
-13.1%
-21.5%
L24 Weeks L12 Weeks L4 Weeks
NIELSEN XAOC ENDING 6/13/20
EX EC U T I N G O N O U R F I V E S TRATE G IC IM P E RATIVE S
DRIVE DOUBLE LEADING
FIRST TO COST
BRAND DOWN PRODUC
MASS S AV I N G S
DEMAND D I G I TA L -TIVITYOUR MISSION: BEST OF BEAUTY ACCESSIBLE TO EVERY EYE, LIP AND FACE
W ELL P OS I T I O N E D T O C O N T I N U E TO G A IN MA RKE T SHA RE
1 2 3
VALUE DIGITAL ABILITY TO
EQUATION ENGAGEMENT MOVE AT
E.L.F. SPEEDQ1 FY 2021 HIGHLIGHTS
DRIVE BRAND DEMAND
O U R S U P E R PO WE RS 100% FIRST PREMIUM UN- UNIVERSAL VEGAN & TO MASS QUALITY BELIEVABLE APPEAL CRUELTY-FREE HOLY GRAILS PRICE
C OL O R C O S M E T I C S Y O Y $ SA LE S G RO WTH
20%
15%
13% 13%
10% 9%
0% 0%
0% -2%
-10% -11% -12%
-14%
-20%
E.L.F. SALES
-30% -30% GOVERNMENT
CATEGORY SALES STIMULUS IMPACT
-38%
-40%
JAN 20 FEB 20 MAR 20 APR 20 MAY 20 JUN 20
NIELSEN XAOC ENDING 6/13/20S EAR C H D E M A N D O U T PA CING THE C ATE G O RY
E.L.F. +1.5%
CATEGORY
-9.5%
Q1 FY 21 YOY GOOGLE SEARCH DEMAND+ 333% PRESS MENTIONS
5.5M INSTAGRAM FOLLOWERS
#EYESLIPSFACE MOST VIRAL CAMPAIGN IN TIKTOK US HISTORY
F OC U S E D O N E N T I R E D IG ITA L E C O SY STE M
NEWC H I P O T L E B R A N D C OLLA BO RATIO N
4 MINS.
TO SELL OUT
100%
NEW CONSUMERS
+3M
TIKTOK VIEWS
+350M
PRESS IMPRESSIONSATTRA C T I N G N E W C O N S U ME RS TO TH E BRA ND
56 %
PURCHASERS AT
RETAIL WERE
NEW SHOPPERS
65 %
PURCHASERS AT
ELFCOSMETICS.COM WERE
NEW SHOPPERS
NUMERATOR | ELFCOSMETICS.COM, FROM 3/1/2020 TO 6/1/2020HIGHLY ENGAGED
BEAUTY CONSUMERS
1.5X
MORE SPEND
THAN
NON-E.L.F.
PURCHASERS
BOVITZ, INC. (2020, JUNE) MAKEUP CATEGORY ATTITUDES & USAGE STUDY
COMMISSIONED BY E.L.F. COSMETICS; CONFIDENTIAL & PROPRIETARYMAJOR STEP UP IN
DIGITALDIGITAL C OMMER C E P E NE T RAT I O N
11% 17%
FY 20 Q1 FY 21TRIPLE DIGIT GROWTH Q1 FY 21 DIGITAL CONSUMPTION
BEAUTY S QU AD LOYA LT Y P RO G RA M
2M
MEMBERS
+150%
GROWTH
BEAUTY SQUAD LOYALTY MEMBERS TO DATE | Q1 FY 21 GROWTH IN NEW MEMBER ACQUISITIONS VERSUS PYelfcosmetics.com/eu elfcosmetics.com/de COUNTRIES WHERE E.L.F. IS AVAILABLE
FIRST TO MASS PRODUCT
CBD COLLECTION
SKIN C AR E C ON SU M P T I O N T RE ND S
+47%
+19%
+32%
>100%
E LFC O SM E TIC S.C O M
-7% -17%
CATEGORY E.L.F. L4W L4W L4W
ENDING ENDING ENDING
Q1 FY 21 4/18 5/16 6/13
NIELSEN XAOC, SKIN CARESTR EN G TH I N C ORE S E G M E NT S
#1 IN PRIMERS #1 IN BRUSHES #1 #2 & #3 BROW PENCILS
36.2% $ SHARE 34.7% $ SHARE 11.0% UNIT SHARE
+6.5 $ SHARE PTS +0.8 $ SHARE PTS +2.0 UNIT SHARE PTS
NIELSEN XAOC L52 WEEKS ENDING 6/13/20BEAU TY SU P E RH E RO E S
PUTTY PRIMER FRANCHISE CAMO CONCEALER FRANCHISE
15.8% $ SHARE OF PRIMERS 15.0% $ SHARE OF CONCEALERS
+15 $ SHARE POINTS +13 $ SHARE POINTS
NIELSEN XAOC L12 WEEKS ENDING 6/13/20#1
PORELESS PUTTY PRIMER
#4
LUMINOUS PUTTY PRIMER
#7
MATTIFYING PUTTY PRIMER
NIELSEN XAOC L12 WEEKS ENDING 6/13/20, RANK WITHIN PRIMER CATEGORYS O L D O UT I N L E S S T H A N 5 D AY S O N E L F CO S M E T I CS .CO M
LEADING PRODUCTIVITY
EXPANDING THIS FALL
EXPANDING THIS FALL
EXPANDING THIS FALL
S K I N C AR E P EN E T RAT I O N 6% 9% 25 % FY 20 Q1 FY 21 Q1 FY 21 TRACKED CHANNELS ELFCOSMETICS.COM
COST SAVINGS
SUPPLY CHAIN FULLY OPERATIONAL AFTER 5 WEEKS
W3LL P E O P L E
COGS SAVINGS
INVEST IN SHARPEN
BRAND RECHARGE PRICINGSTRATEGIC EXTENSIONS
W3LL PEOPLE
40 EWG-VERIFIED PRODUCTS
NEW LIFESTYLE BEAUTY BRAND
“What makes us different is
also what makes us wildly,
boldly, and marvelously who
we were born to be.”COMING 2021
MULTI-YEAR MULTI-CATEGORY PRODUCT PIPELINE
DR. RENEE SNYDER Board-certified Dermatologist Associate Professor, University of Texas School of Medicine Practice in medical dermatology & skin rejuvenation W3LL PEOPLE Co-Founder E.L.F. BEAUTY family member
STRATEGIC FRAMEWORK
THE BOLD DISRUPTOR WITH A KIND HEART.
INCLUSIVE, ACCESSIBLE, CRUELTY-FREE BEAUTY.
LIFESTYLE
BEAUTY BRANDLIFESTYLE
BEAUTY BRAND
TREND DRIVEN MASS BEAUTY PLANT POWERED MASSTIGE BEAUTY CRAFTED WITH ALICIA KEYS
FOR EVERY EYE, FOR THE CLEAN FOR
LIP AND FACE BEAUTY ENTHUSIAST HOLISTIC WELLNESSPRESTIGE PRICE
LIFESTYLE
ACCESSIB LE DISTRIBUTION
EXC LUS IVE DIST RIB U TION
BEAUTY BRAND
MASS PRICEMOVING AT E.L.F. SPEED
D I G I TAL + C O R E VA LU E = O U TPA C E STR EN G TH P R O P O S I T IO N THE C ATE G O RY
MANDY FIELDS SENIOR VICE PRESIDENT & CHIEF FINANCIAL OFFICER
T O D AY ’ S A GE NDA
1 2 3
Q 1 F INANCIA L P ER SP ECT I V E S T RAT E G I C
R ESULTS ON C U R R E NT E X T E NS I O NS
EN VI R ON M E NTQ 1 F Y 2 1 N E T SA LE S
+8 %
$ 65
MILLIONC OL O R C O S M E T I C S Y O Y $ SA LE S G RO WTH
20%
15%
13% 13%
10% 9%
0% 0%
0% -2%
-10% -11% -12%
-14%
-20%
E.L.F. SALES
-30% -30% GOVERNMENT
CATEGORY SALES STIMULUS IMPACT
-38%
-40%
JAN 20 FEB 20 MAR 20 APR 20 MAY 20 JUN 20
NIELSEN XAOC ENDING 6/13/20Q1 FY 2 1 S H AR E C H A N GE ( B P S ) - T O P 5 C O LO R C O SME TIC S BRA NDS
E.L.F. E . L . F.
+100
5.5%
SHARE
L’OREAL COVERGIRL
-190 -190 REVLON
MAYBELLINE -230
-250
NIELSEN XAOC L12 WEEKS ENDING 6/13/20Q 1 F Y 2 1 G R O S S M A R GI N E LFC O SM E TIC S.C O M
LESS
+ 500 P RO M O T I O NA L
BPS
S T RO NG E R
G RO S S M A RG I N
67 %GR O S S M A R GI N DRIVE RS
MA RG IN
A C C RE TIVE
E-COMMERCE MIX
RE TA IL P RIC E
FX
INC RE A SE SA D J U S T E D SG &A
51%
47 %
Q1 FY 20 Q1 FY 21MAR K ETI N G & D I GI TA L TA RG E T
I N VES TM E N T RA NG E
11% 12-14%
Q1 FY 21Q 1 F Y 2 1 A D J U STE D E BITDA
+7 %
$ 16
MILLIONAD J US TED N E T I N C O M E A DJU STE D E PS
$9M $0.14 $0.17
$7M
Q1 FY 20 Q1 FY 21 Q1 FY 20 Q1 FY 21S T R O N G L I QU IDITY
> 100
$
MILLION
C AS H O N H A N D + R E V O LV ING C RE DIT FA C ILITYC AS H P R I O RI T I E S
I N V E S T I NG
FO R TI F Y I N G FU E LING
B E H I N D FIVE
TH E B ALAN C E LO NG - TE RM
S T R AT E G IC
S H EET G RO WTH
I M P E R AT I VE SFISCAL 2021 GUIDANCE REMAINS SUSPENDED
SHORT-TERM RETURN TO LONG-TERM UNCERTAINTY NORMA LCY MODEL
L O N G- T E R M E C O N O M IC M O DE L
Scenario #1 Scenario #2
WITHOU T significant space W I T H significant space gains
gains or strategic extensions and strategic extensions
SA L E S L O W T O M I D S I N GLE MID TO HIG H SING LE
D I GI T N E T S A L E S C AG R DIG IT NE T SA LE S C A G R
A D JUS TED O U T PA C E S O U TPA C E S
EBITDA S A L E S GR O W T H SA LE S G RO WTH
MODEL AS PRESENTED IN PRESS RELEASE AND EARNINGS CALL ON FEBRUARY 5, 2020.
CAGR REPRESENTS EXPECTATIONS OVER A 3 YEAR TIME FRAME, EXCLUDING COVID-19 IMPACT.TARANG P. AMIN
CHAIRMAN &
CHIEF EXECUTIVE OFFICERMANDY FIELDS RICHARD F. BARUCH JR.
TARANG P. AMIN
SENIOR VICE PRESIDENT & SENIOR VICE PRESIDENT &
CHAIRMAN & CEO
CHIEF FINANCIAL OFFICER CHIEF COMMERCIAL OFFICER
WE HAVE THE
RIGHT TEAM
73 % 60 % 46 %
FEMALE MILLENNIAL DIVERSE
SCOTT K. MILSTEN
KORY MARCHISOTTO FANNY XU
SENIOR VICE PRESIDENT, GENERAL
SENIOR VICE PRESIDENT & VICE PRESIDENT, GENERAL
COUNSEL, CORPORATE SECRETARY
CHIEF MARKETING OFFICER MANAGER, CHINA OPERATIONS
& CHIEF PEOPLE OFFICER
EXECUTIVE TEAM
Highly-experienced, blue-chip background
executive team with proven experience
managing and growing brand portfolios
JOSH FRANKS
SENIOR VICE PRESIDENT,
OPERATIONS
85TARANG P. AMIN
LAUREN COOKS LEVITAN RICHELLE P. PARHAM
CHAIRMAN & CEO
WE HAVE THE
RIGHT TEAM
1 9OF 67 %
PUBLIC COMPANIES WOMEN ON BOARD
BETH M. PRITCHARD
KIRK L. PERRY
LEAD INDEPENDENT DIRECTOR
SABRINA L. SIMMONS
WITH OVER OF DIRECTORS
(OUT OF 4,800 PUBLIC COMPANIES)
MAUREEN C. WATSON RICHARD G. WOLFORD LORI KIETHMASSIVE AUDIENCE REACH #1 MASS
E-COMMERCE SITE
37 M 8.9M
30 M
TOTAL E.L.F. TOTAL SOCIAL
FOLLOWER BASE FOLLOWERS
(ACROSS TOP PLATFORMS)
ANNUAL TRAFFIC
$68M EMV (FY 21 Q1) +13% YOY (US+UK+APP)
GEN Z PREFERENCE
17M
#4 FAVORITE TEEN BRAND UNIQUE ANNUAL VISITORS
WE KNOW OUR (UP FROM #6 LAST YEAR) (US+UK+APP)
CONSUMERS AND HOW Source: Piper Sandler ‘Taking Stock With Teens Spring 2020’
TO ENGAGE THEM TIKTOK ENGAGEMENT
2.0M
LOYALTY MEMBERS
6.2 B 4.5 M
#EYESLIPSFACE VIEWS VIDEO CREATES
#1 MOST VIRAL CAMPAIGN
IN TIKTOK US HISTORY 670K
BEAUTY PROFILES
INSTAGRAM FOLLOWERS
5.5 M
MILANI: 3.8M
FOLLOWERS
WET N WILD: 3.1M
COVERGIRL: 2.9M
80%
(JUNE 2020) MOBILE TRAFFIC
REVLON: 2.6M#1
BRUSH BRAND
#1 FACE BRUSHES
#1 EYE BRUSHES
#1
PRIMER BRAND
#1 AND #2 PRIMERS
WE KNOW HOW
TO MAKE PRODUCTS
PEOPLE WANT
#1
100+ new items per year
#2 and #3 EYEBROW
PENCILS
300+ ideas in pipeline
Highly integrated
innovation team
#1
Robust insights from
SETTING SPRAY BRAND #1 mass e-commerce site
#1
EYE LASH
CURLER BRAND
NIELSEN U.S. XAOC, L52 WEEKS ENDING 6/13/20WE MOVE AT
E.L.F. SPEED
From concept to
digital commerce in as
few as 13 weeks
First to market, first to mass30 69
THIRD PARTY SUPPLIERS E.L.F. SHANGHAI
FROM FILLERS TO EMPLOYEES IN PRODUCT
COMPONENT DEVELOPMENT, SOURCING
SUPPLIERS IN CHINA AND QUALITY
WE HAVE
WORLD-CLASS
BEST COMBINATION OF
OPERATIONS
COST + QUALITY + SPEED Horizontal integration with like-minded
suppliers provides utmost control
Dedicated quality team focused on quality
assurance & control
State of the art automated DTC fulfillment in
Columbus, OH with ability to customize
250 K BUILDING
OUR 1ST
MANUFACTURING
Distribution warehouse recognized
as best in class by retailers
SQ FT RETAIL
PLANT IN
DISTRIBUTION
SO.
WAREHOUSE
CALIFORNIA
IN SO. CAL.WE KNOW HOW
TO WIN IN MARKET
From 11K to 110K total linear feet
in retail in last 5 years
Highest productivity of sales per linear
foot in Target & Walmart
Highly experienced team partnering DISTRIBUTED
IN OVER
strategically with leading global retailers
25 K
RETAIL DOORS
NIELSEN XAOC L12 WEEKS ENDING 6/13/20WE KNOW
HOW TO BUILD
BRANDS
From a mono-brand company
to a multi-brand house
Selectively pursuing acquisitions
and incubating new brandsTHANK YOU
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