Q4 2024 elf Beauty Inc Earnings Call
It is accessible to every eye lip face and skin concern.
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We lead innovation, taking inspiration from our community and of course, we deliver profitable growth.
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Speaker Change: So let's continue to create a different kind of beauty company has different kind of company period and have a great day and let's go ring that bell.
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Speaker Change: Okay.
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KC cotton: Thank you for joining us today to discuss <unk> beauty's fourth quarter and fiscal 'twenty four results I'm KC cotton, Vice president of corporate development and Investor Relations.
Speaker Change: <unk> me today are touring Amin, Chairman and Chief Executive Officer, and Mandy fields, Senior Vice President and Chief Financial Officer.
Washington.
Yeah.
We encourage you to tune into our webcast presentation for the best viewing experience, which you can access on our website at Investor <unk> F beauty dotcom.
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Speaker Change: Since many of our remarks today contain forward looking statements. Please refer to our earnings release and reports filed with the SEC, where you'll find factors that could cause actual results to differ materially from these forward looking statements.
Speaker Change: In addition, the company's presentation today includes information presented on a non-GAAP basis. Our earnings release contains reconciliations of the differences between the non-GAAP presentation and the most directly comparable GAAP measure.
Speaker Change: With that let me turn the webcast over to Turing.
Speaker Change: Thank you Casey and good afternoon, everyone.
Turing: Today, we will discuss the drivers of our exceptional fourth quarter and fiscal 'twenty four performance and our initial outlook for fiscal 'twenty five.
Speaker Change: I want to start by recognizing the F beauty team.
Speaker Change: We hit a major milestone this year achieving over $1 billion in net sales.
Speaker Change: In fiscal 'twenty four we grew net sales by 77%.
Speaker Change: Increased gross margin by approximately 330 basis points.
Speaker Change: Grew adjusted EBITDA by 101% and increased market share 305 basis points, well above our original expectations.
Speaker Change: We recently rang the opening Bell at the New York Stock exchange to commemorate our 20th anniversary as a company and celebrate the exceptional consistent category leading growth we've delivered over the last two decades.
Unknown Executive: We are united in our mission to make the best of beauty accessible to every eye, lip, face, and skin concern. We lead innovation, taking inspiration from our community, and, of course, we deliver profitable growth. So let's continue to create a different kind of beauty company. Heck, a different kind of company, period. And have a great day, and let's go ring that bell.
But kind of beauty company.
<unk> kind of company period, and have a great day, and let's go bring that up.
Speaker Change: Q4 marked our 21st consecutive quarter of both net sales growth and market share gains putting L beauty in a rarefied group of high growth companies.
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Speaker Change: We are one of only five public consumer companies out of 274 that has grown for 21 straight quarters and average at least 20% sales growth per quarter.
Thank you for joining us today to discuss F beauty's fourth quarter and fiscal 'twenty four results I'm KC cotton, Vice President of corporate development and Investor Relations with me today are touring Amin, Chairman and Chief Executive Officer, and Mandy fields.
Speaker Change: In Q4, we grew net sales by 71% increased gross margin by approximately 180 basis points and grew adjusted EBITDA, 93%.
And your Vice President and Chief Financial Officer, we.
Kristina Casey Katten: Thank you for joining us today to discuss e.l.f. Beauty's fourth quarter and fiscal 24 results. I'm Casey Katten, Vice President of Corporate Development and Investor Relations. With me today are Tarang Amin, Chairman and Chief Executive Officer, and Mandy Fields, Senior Vice President and Chief Financial Officer. We encourage you to tune into our webcast presentation for the best viewing experience, which you can access on our website at investor.elfbeauty.com. Since many of our remarks today contain forward-looking statements, please refer to our earnings release and reports filed with the SEC, where you'll find factors that could cause actual results to differ materially from these forward-looking statements.
We encourage you to tune into our webcast presentation for the best viewing experience, which you can access on our website at Investor Dot <unk> Dot com.
Speaker Change: We've continued to prioritize three areas with significant runway for growth.
Speaker Change: Color cosmetics skincare and international.
Since many of our remarks today contain forward looking statements. Please refer to our earnings release and reports filed with the SEC, where you'll find factors that could cause actual results to differ materially from these forward looking statements.
Speaker Change: Let me update you on our progress in Q4 in.
Speaker Change: In color cosmetics, we continue to significantly outperform the category.
Speaker Change: In Q4 F cosmetics grew 30% in tracked channels as compared to a category that was down 3%.
In addition, the company's presentation today includes information presented on a non-GAAP basis. Our earnings release contains reconciliations of the differences between the non-GAAP presentation and the most directly comparable GAAP measure.
Speaker Change: We grew our share 325 basis points driving our brand rankings to new highs.
Speaker Change: On a dollar share basis, we achieved the number two ranked for the first time as compared to the number three brand a year ago.
With that let me turn the webcast over to Turing.
Thank you Casey and good afternoon, everyone.
Kristina Casey Katten: In addition, the company's presentation today includes information presented on a non-GAP basis. Our earnings release contains reconciliations of the differences between the non-GAP presentation and the most directly comparable GAP measure. With that, I will turn the webcast over to Tarang.
Today, we will discuss the drivers of our exceptional fourth quarter and fiscal 'twenty four performance and our initial outlook for fiscal 'twenty five.
Speaker Change: And on a unit basis, we achieved the number one ranked for the first time as compared to the number two brand a year ago.
Speaker Change: We remain bullish on the color cosmetics category.
I want to start by recognizing the <unk> beauty team, we hit a major milestone this year achieving over $1 billion in net sales.
Speaker Change: In Q4, the category lapped a period last year when trends were up 18%.
Tarang P. Amin: Thank you, Casey, and good afternoon, everyone. Today, we'll discuss the drivers of our exceptional fourth quarter and fiscal 24 performance and our initial outlook for fiscal 25. I want to start by recognizing the e.l.f.
Speaker Change: When looked at on a two year stacked basis category trends accelerated relative to last quarter, we remain confident in our ability to significantly outpaced category growth rates and take share.
In fiscal 'twenty four we grew net sales by 77%.
Increased gross margin by approximately 330 basis points grew.
<unk> grew adjusted EBITDA by 101% and increased market share 305 basis points, well above our original expectations.
Speaker Change: In skincare, we similarly continue to meaningfully outperform the category.
Tarang P. Amin: Beauty team. We hit a major milestone this year, achieving over a billion dollars in net sales. In fiscal 24, we grew net sales by 77%, increased gross margin by approximately 330 basis points, grew Adjusted EBITDA by 101%, and increased market share by 305 basis points, well above our original expectations. We recently rang the opening bell at the New York Stock Exchange to commemorate our 20th anniversary as a company and celebrate the exceptional, consistent, category-leading growth we've delivered over the last two decades.
Speaker Change: In Q4 L skin grew 38% in tracked COVID-19 times category growth of 2%.
We recently rang the opening Bell at the New York Stock exchange to commemorate our 20th anniversary as a company and celebrate the exceptional consistent category leading growth we've delivered over the last two decades.
Speaker Change: We grew our share of <unk> 45 basis points, increasing three ranked positions to the number 11 brand as compared to the number of <unk> 14, a year ago.
Q4 marked our 20 <unk> consecutive quarter of both net sales growth and market share gains putting L beauty in a rarefied group of high growth companies.
We're also pleased with the growth we see for notorious.
Speaker Change: The clinically effective Biocompatible skincare brand, we acquired this past October.
Speaker Change: Notorious contributed approximately 17 points to our net sales growth in Q4.
We are one of only five public consumer companies out of 274 that has grown for 21 straight quarters and average at least 20% sales growth per quarter.
Speaker Change: Turning to international our net sales grew 115% in Q4 fueled by strength in Canada and the U K.
Tarang P. Amin: Q4 marked our 21st consecutive quarter of both net sales growth and market share gains, putting e.l.f. Beauty in a rarefied group of high-growth companies. We are one of only five public consumer companies out of 274 that has grown for 21 straight quarters and averaged at least 20% sales growth per quarter. In Q4, we grew net sales by 71%, increased gross margin by approximately 180 basis points, and grew adjusted EBITDA by 93%. We've continued to prioritize three areas with significant runway for growth. Color Cosmetics.
In Q4, we grew net sales by 71% increased gross margin by approximately 180 basis points and grew adjusted EBITDA, 93%.
Speaker Change: Elfa is the fastest growing among the top 10 cosmetics brands in both Canada, and the U K driving significant share gains in each.
Speaker Change: In Canada, we increased our ranked the number three brand as compared to the number six brand a year ago.
We've continued to prioritize three areas with significant runway for growth.
Speaker Change: In the U K, we increased our ranked the number four brand as compared to the number seven brand a year ago.
Color cosmetics skincare and international.
Let me update you on our progress in Q4.
Speaker Change: International drove 16% of our sales in Q4 on a much bigger total business as compared to 13% a year ago.
In color cosmetics, we continue to significantly outperform the category.
In Q4 F cosmetics grew 30% in tracked channels as compared to a category that was down 3%.
Speaker Change: Across categories and geographies the three fundamental drivers of our business remain the same.
Tarang P. Amin: Skincare and International, Let me update you on our progress in Q4. In color cosmetics, we continue to significantly outperform the category. In Q4, e.l.f.
We grew our share 325 basis points driving our brand rankings to new highs.
Speaker Change: Our value proposition.
Speaker Change: Powerhouse innovation.
On a dollar share basis, we achieved the number two ranked for the first time as compared to the number three brand a year ago.
Speaker Change: And disruptive marketing engine.
Unknown Executive: Cosmetics grew 30% in track channels as compared to a category that was down 3%. We grew our share by 325 basis points, driving our brand rankings to new highs. On a dollar share basis, we achieved the number two rank for the first time as compared to the number three brand a year ago. And on a unit basis, we achieved the number one rank for the first time as compared to the number two brand a year ago. We remain bullish on the color cosmetics category. In Q4, the category lagged a period last year when trends were up 18%. When looked at on a two-year stack basis, category trends accelerated relative to last quarter.
Speaker Change: Let me walk through how each underpinned our strength in Q4.
And on a unit basis, we achieved the number one ranked for the first time as compared to the number two brand a year ago.
Speaker Change: First we're known for our value proposition.
Speaker Change: Our mission is to make the best of beauty accessible to every eye lip face and skin concern.
We remain bullish on the color cosmetics category.
Speaker Change: We have a unique ability to deliver high quality Holy Grails, taking inspiration from our community and the best products in prestige and bring them to market at an extraordinary value.
In Q4, the category lapped a period last year when trends were up 18% when looked at on a two year stack basis category trends accelerated relative to last quarter, we remain confident in our ability to significantly outpaced category growth rates and take share.
Speaker Change: The average price point for <unk> is about $6 50 today as compared to nearly $9 50 for legacy mass cosmetics brands and over $20 for prestige brands.
Speaker Change: In skincare, we similarly continue to meaningfully outperform the category.
Speaker Change: Our value proposition underpins, our strong unit growth were the only top five brand to grow units this past year.
Speaker Change: In Q4 L scheme grew 38% in tracked COVID-19 times category growth of 2%.
Unknown Executive: We remain confident in our ability to significantly outpace category growth rates and take share. In skin care, we similarly continue to meaningfully outperform the category. In Q4, e.l.f.
Speaker Change: We grew our share of <unk> 45 basis points, increasing three ranked positions to the number 11 brand as compared to the number of <unk> 14, a year ago.
Speaker Change: The second driver of our performance is our powerhouse innovation.
Speaker Change: Our innovation engine is built category leadership over time.
Five years ago, <unk> had the number one or two position across eight segments of the color cosmetics category.
Speaker Change: We're also pleased with the growth we see for notorious the.
Tarang P. Amin: Skin grew 38% in tracked channels, 19 times category growth of 2%. We grew our share 45 basis points, increasing three rank positions to the number 11 brand as compared to the number 14 a year ago. We're also pleased with the growth we see for Notorium, the clinically effective biocompatible skin care brand we acquired this past October. Notorium contributed approximately 17 points to our net sales growth in Q4.
Speaker Change: Clinically effective biocompatible skin care brand, we acquired this past October.
Speaker Change: Today, <unk> has a number one or two position across 18 segments, which collectively make up almost 80% of elf cosmetic sales.
Speaker Change: Notorious contributed approximately 17 points to our net sales growth in Q4.
Turning to international our net sales grew 115% in Q4 fueled by strength in Canada and the U K.
Speaker Change: We continue to deliver strong sales growth and share gains across these segments.
Speaker Change: We have a track record of building growing product franchises in both cosmetics and skincare that endure instead of the typical one and done launches.
Speaker Change: <unk> was the fastest growing among the top 10 cosmetics brands in both Canada, and the U K driving significant share gains in each.
Speaker Change: Our powerhouse franchises are growing year after year as we launch innovation within each the entire franchise grows.
Tarang P. Amin: Turning to international, our net sales grew 115% in Q4, fuelled by strength in Canada and the U.K. e.l.f. was the fastest growing among the top 10 cosmetics brands in both Canada and the UK, driving significant share gains in each. In Canada, we increased our rank to the number three brand as compared to the number six brand a year ago. In the UK, we increased our rank to the number four brand as compared to the number seven brand a year ago.
Speaker Change: In Canada, we increased our ranked the number three brand as compared to the number six brand a year ago.
Speaker Change: In Q4, we extended our power group franchise into the setting spray category with the launch of our power group Dewey setting spray.
Speaker Change: In the U K, we increased our ranked the number four brand as compared to the number seven brand a year ago.
Speaker Change: International drove 16% of our sales in Q4 on a much bigger total business as compared to 13% a year ago.
Rice at an incredible value of $10 compared to a prestige item at $38.
Speaker Change: Alright have made quite attentiveness I've been using it every single day to HFC theory Gal.
Speaker Change: Across categories and geographies the three fundamental drivers of our business remain the same.
Speaker Change: It really feels like nothing.
Speaker Change: Our value proposition.
Speaker Change: But solar fashion at the same time look at the list.
Tarang P. Amin: International drove 16% of our sales in Q4 on a much bigger total business as compared to 13% a year ago. Across categories and geographies, the three fundamental drivers of our business remain the same: our Value Proposition, Powerhouse Innovation, and Disruptive Marketing. Let me walk through how each underpinned our strength in Q4.
Speaker Change: Powerhouse innovation.
Speaker Change: And disruptive marketing engine.
Speaker Change: No water jump with something like this no powder it literally looks like my skin drink a glass of water and the best way. It makes your makeup melt into your base Latina Mirror right. Now this is crazy take my skin, but better.
Speaker Change: Let me walk through how each underpinned our strength in Q4.
Speaker Change: First we're known for our value proposition.
Speaker Change: Our mission is to make the best of beauty accessible to every eye lip face and skin concern.
Speaker Change: With the initial launch we're seeing a double digit lift in sales of our original power group primer that launched over two years ago. We're also innovating in the industry's top segment, where we under index on share like skincare.
Speaker Change: We have a unique ability to deliver high quality Holy Grails, taking inspiration from our community and the best products in prestige and bring them to market at an extraordinary value.
Unknown Executive: First, we're known for our value propositions. Our mission is to make the best of beauty accessible to every eye, lip, face, and skin concern. We have a unique ability to deliver high-quality holy grails, taking inspiration from our community and the best products in prestige and bringing them to market at an extraordinary value. The average price point for e.l.f.
Speaker Change: While we've tripled our market share over the last five years, we remain significantly underpenetrated today.
Speaker Change: The average price point for <unk> is about $6 50 today as compared to nearly $9 50 for legacy mass cosmetics brands and over $20 for prestige brands.
For context as compared to the 10.5% share we have in cosmetics, we have less than 2% share in skincare.
Speaker Change: Our value proposition underpins, our strong unit growth.
Speaker Change: We're continuing to drive growth in skin with Holy Grail innovation.
Speaker Change: Were the only top five brand to grow units this past year.
Speaker Change: In Q4, L skin launched bronze and drops one of the most requested products from our community price at an incredible value of $12 compared to a prestige item at $38.
Unknown Executive: is about $6.50 today, as compared to nearly $9.50 for legacy mass cosmetics brands and over $20 for prestige brands. Our value proposition underpins our strong unit growth. We're the only top five brand to grow units this past year. The second driver of our performance is powerhouse innovation. Our innovation engine has built category leadership over time. Five years ago, e.l.f.
Speaker Change: The second driver of our performance is our powerhouse innovation.
Speaker Change: Our innovation engine is built category leadership over time.
Speaker Change: Five years ago, <unk> had the number one or two position across eight segments of the color cosmetics category.
Speaker Change: And we know and love has come Allied Brian thing dropped both our sell create if we know anything about L. We know that when we talk they listen and all of these brands and jobs because.
Speaker Change: Today, <unk> has a number one or two position across 18 segments, which collectively make up almost 80% of our cosmetic sales.
Speaker Change: The San Juan is something to help our faith below underneath our makeup and they hit it every time bronzewing drops was the best selling skin care product on our site in Q4, the third driver of our performance is our disruptive marketing engine.
Speaker Change: We continue to deliver strong sales growth and share gains across these segments.
Unknown Executive: had the number one or two position across eight segments of the color cosmetics category. Today, e.l.f. has the number one or two position across 18 segments, which collectively make up almost 80% of its sales.
We have a track record of building growing product franchises in both cosmetics and skincare that endure instead of the typical one and done launches.
Speaker Change: We have a unique ability to combine the best of beauty culture, and entertainment to attract and engage generations of consumers across a variety of platforms.
Our powerhouse franchises are growing year after year as we launch innovation within each the entire franchise grows.
Unknown Executive: cosmetic sales. We continue to deliver strong sales growth and share gains across these segments. We have a track record of building growing product franchises, in both cosmetics and skin care, that endure. Instead of the typical one-and-done launch, our powerhouse franchises are growing year after year. As we launch innovation within each, the entire franchise grows. In Q4, we extended our Power Grip franchise into the setting spray category with the launch of our Power Grip Dewey Setting Spray, priced at an incredible value of $10 compared to a prestige item at $38.
Speaker Change: In Q4, we extended our power group franchise into the setting spray category with the launch of our power group Dewey setting spray priced at an incredible value of $10 compared to a prestige item at $38.
Speaker Change: Alf remains Gen Z favorite.
Speaker Change: In Piper Sandler as latest taking stock with teens survey Alf cosmetic ranked the number one <unk> brand for the fifth consecutive season.
Speaker Change: We grew our mindshare by 16 points versus last year with our 38% Mindshare now over four times the level of the number two brand.
Speaker Change: Alright have made quite attentiveness I've been using it every single day tranches here.
Speaker Change: It literally feels like nothing but seller cash and at the same time look at the net.
Speaker Change: F skin and <unk> cosmetics Dot Com also ranked in the top 10 teen favorites in their respective areas.
Speaker Change: No water jump with selling days.
Speaker Change: No power and literally look segments and drink a glass of water and the best way makes your makeup melt into your base looking in there right. Now this is crazy stake my skin, but better.
Speaker Change: We're growing our audience beyond Gen Z recent surveys show Elf cosmetics ranks number two in mindshare amongst millennials and number one in mind share among Gen Alpha.
Unknown Executive: Alright, I have made quite a dent in this. I've been using this every single day. Shake, shake, shake.
Unknown Executive: Here we go. It literally feels like nothing but is so refreshing at the same time. Look at the mess. No water droplets on my face. No powder.
Speaker Change: With the initial launch we're seeing a double digit lift in sales of our original power group primer that launched over two years ago. We're also innovating in the industry's top segment, where we under index on share like skincare.
Speaker Change: This progress in penetrating mindshare across cohorts shows that alpha's, becoming a multi generational brand driven by positivity inclusivity and accessibility in everything we do.
Unknown Executive: It literally looks like my skin drank a glass of water in the best way. It makes your makeup melt into your face. Looking in the mirror right now, this is crazy.
Speaker Change: While we've tripled our market share over the last five years, we remain significantly underpenetrated today.
Unknown Executive: It's like my skin, but better. With the initial launch, we're seeing a double-digit lift in sales of our original Power Grip primer that launched over two years ago. We're also innovating in the industry's top segments where we under-index on share, like skin care. While we've tripled our market share over the last five years, we remain significantly underpenetrated today.
Speaker Change: You can also see in the age ranges in our marketing campaigns, where brand for every eye lip and face.
Speaker Change: For context as compared to the 10, 5% share we have in cosmetics, we have less than 2% share in skincare.
Speaker Change: We're also reaching new audiences through our unique brand on brand partnerships with like minded disruptors.
Speaker Change: We're continuing to drive growth in skin with Holy Grail innovation.
Speaker Change: In Q4, we partner with liquid death, one of the fastest growing beverage brands to launch corpse paint.
Speaker Change: In Q4, L skin launched bronze and drops one of the most requested products from our community price at an incredible value of $12 compared to a prestige item at $38.
Speaker Change: So julio.
Unknown Executive: For context, as compared to the 10.5% share we have in cosmetics, we have less than 2% share in skin care. We are continuing to drive growth in skin care with Holy Grail Innovation. In Q4, e.l.f. Skin launched Bronzing Drops, one of the most requested products from our community. At an incredible value of $12 compared to a prestige item at $38, what we know and love has come out with Bronzing Drops. Those are so pretty.
Speaker Change: Okay.
Speaker Change: Okay.
Okay.
Speaker Change: And we know and love had kind of allied brands and dropped those or sell.
Speaker Change: Your eyes lips and face like your favorites.
Speaker Change: For liquid gas send out each core feed content and with five Super cute filing cases, penny total close to poverty awesome huge.
Speaker Change: If we know anything about L. We know that when we talk they listen all of these Brandon jobs because.
Speaker Change: Now you could look at dark on the outside as you are on the inside to working towards.
Speaker Change: The San Juan it's something to help our base below underneath our makeup and they hit it every time bronzewing drops was the best selling skin care product on our site in Q4, the third driver of our performance is our disruptive marketing engine.
Speaker Change: The workover.
Speaker Change: Okay.
Speaker Change: Okay.
Speaker Change: Yeah.
Gross.
Speaker Change: Oh, sorry, I haven't seen you in like.
Unknown Executive: If we know anything about e.l.f., we know that when we talk, they listen. They came out with these Bronzing Drops because us, the fans, wanted something to help our faces glow underneath our makeup, and they hit it every time. Bronzing Drops was a best-selling skincare product on our site in Q4. The third driver of our performance is our disruptive marketing engine. We have a unique ability to combine the best of beauty, culture, and entertainment to attract and engage generations of consumers across a variety of platforms; e.l.f. remains a Gen Z favorite.
Speaker Change: We have a unique ability to combine the best of beauty culture, and entertainment to attract and engage generations of consumers across a variety of platforms.
Speaker Change: 15 years.
Speaker Change: Ma'am.
Speaker Change: Yeah.
Speaker Change: Get yours was supply black Elk cosmetic dot com slash paint.
Speaker Change: Alf remains Gen Z favorite.
Speaker Change: The response from our community was phenomenal our campaign drove over 12 billion press impressions propelled a triple digit lift in visits to off cosmetics dot com.
Speaker Change: In Piper Sandler as latest taking stock with teens survey Alf cosmetic ranked the number one <unk> brand for the fifth consecutive season.
Speaker Change: We grew our mindshare by 16 points versus last year with our 38% Mindshare now over four times the level of the number two brand.
Speaker Change: And selling out the collection in 45 minutes with 68% of purchasers new to health.
Speaker Change: In our Alf up experience the digital replication of the collab in or roadblocks native way resulted in record UGC redemptions.
Unknown Executive: In Piper Sandler's latest Taking Stock with Teens survey, e.l.f. Cosmetic ranked number one teen brand for the fifth consecutive season. We grew our mindshare by 16 points versus last year, with our 38% mindshare now over four times the level of the number two brand, e.l.f. Skin and e.l.f.
Speaker Change: L skin and <unk> cosmetics Dot Com also ranked in the top 10 teen favorites in their respective areas.
Speaker Change: We're growing our audience beyond Gen Z recent surveys show Elf cosmetics ranks number two in mindshare amongst millennials and number one in mind share among Gen Alpha.
Speaker Change: Over the past five years, we've increased our marketing investment from 7% of net sales to 25%.
Speaker Change: Our marketing investment is working driving ROI multiples above industry benchmarks, even as we've taken our spending up.
Speaker Change: This progress in penetrating mindshare across cohorts shows that alpha's, becoming a multi generational brand driven by positivity inclusivity and accessibility in everything we do.
Speaker Change: Since 2020, we've doubled our unaided awareness in the U S from 13% to 26%.
Unknown Executive: Cosmetics.com also ranked in the top 10 teen favorites in their respective areas. We're growing our audience beyond Gen Z. Recent surveys show e.l.f. Cosmetics ranks number two in Mindshare amongst Millennials and number one in Mindshare among Gen Alpha. This progress in penetrating Mindshare across cohorts shows that e.l.f. is becoming a multi-generational brand driven by positivity, inclusivity, and accessibility in everything we do. You can also see it in the age ranges in our marketing campaigns.
Speaker Change: You can also see in the age ranges in our marketing campaigns, where brand for every eye lip and face.
Speaker Change: That 26% unaided awareness today compares to the leading U S mass cosmetics brand at 52% illustrating significant runway for growth.
We're also reaching new audiences through our unique brand on brand partnerships with like minded disruptors.
Speaker Change: Complementing our financial performance over the past two decades I'm proud that we continue to lead with purpose as we strive to create a different kind of beauty company.
Speaker Change: In Q4, we partner with liquid death, one of the fastest growing beverage brands to launch corpse paint.
Unknown Executive: We're a brand for every eye, lip, and face. We're also reaching new audiences through our unique brand-on-brand partnerships with like-minded disruptors. In Q4, we partnered with Liquid Death, one of the fastest growing beverage brands, to launch Corpse Paint. He's so dreamy. I know. Whoa!
Speaker Change: So julio.
Speaker Change: One that is purpose led and results driven.
Okay.
Speaker Change: Out of nearly 4200 public companies in the U S. We were one of only four with a board that is at least two thirds women and one third diverse.
Speaker Change: Okay.
Speaker Change: Thanks.
Speaker Change: Your eyes lips and face like Youre seeing recently.
Speaker Change: Firstly, we get that out.
Speaker Change: A few weeks ago, we launched our biggest purpose led initiatives yet changed the board game encouraging companies to diversify their boards.
Speaker Change: Each core fleet cost in terms of five Super cute filing cases tenants don't propose to cover all of them.
Unknown Executive: He's so dreamy.
Speaker Change: Now you can look at dark on the outside.
Speaker Change: At Els, we stand for every eye lip and face, but that spirit of inclusivity doesn't show up everywhere its Shane.
Speaker Change: On the inside to work through.
Speaker Change: The workover.
Speaker Change: Companys board represent its stockholders and community. So if boards don't reflect the diversity of the real world real people get left behind in fact, there are more men on U S. Corporate boards named Richard Rich for Dec and entire groups of underrepresented people, that's a lot of gigs and not enough of everyone else.
Speaker Change: Okay.
Speaker Change: Yes.
Speaker Change: Gross.
Speaker Change: Oh, sorry, I haven't seen you in like.
Speaker Change: 15 years.
Unknown Executive: [inaudible]
Speaker Change: Mom.
Speaker Change: Yeah.
Unknown Executive: Super cute contouring, Addison. Love the look, Piper. Thanks, Glowstar.
Speaker Change: Did you raise less supply glad health cosmetic dot com slash testing.
Unknown Executive: Hey guys, who wants me against Ghostblood? Glowstar? I'm what? Glowstar, I haven't seen you in like...
Speaker Change: That's why we're changing the board game, we believes needs at the table are for people of all ethnicities and gender and our board is true do you know how many of the 4200 publicly traded companies in the U S can say that for four wheel that's less than 1%.
Speaker Change: The response from our community was phenomenal our campaign drove over 12 billion press impressions propelled the triple digit lift in visits to off cosmetics Dot com.
Speaker Change: And selling out the collection in 45 minutes with 68% of purchasers new to health.
Speaker Change: Having a board that represent real people using just the right thing to do it's also good for the bottom line.
Speaker Change: And our Alf up experience the digital replication of the collab in or roadblocks native way resulted in record UGC redemptions.
Unknown Executive: The response from our community was phenomenal. Our campaign drove over 12 billion press impressions, propelled a triple-digit lift in visits to e.l.f.cosmetics.com, and sold out the collection in 45 minutes with 68% of purchasers new to e.l.f. In our e.l.f.
Speaker Change: We're working to make sure more women and diverse meters are placed on corporate boards across the country and we invite other companies to join us because together, we can change the board game.
Speaker Change: Over the past five years, we've increased our marketing investment from 7% of net sales to 25%.
Speaker Change: We partnered with legendary tennis Star and equality champion Billie Jean King and created a series of video shorts to spread awareness in a humorous way of the inequality on corporate boards.
Tarang P. Amin: experience, the digital replication of the collab in a Roblox native way resulted in record UGC redemption. Over the past five years, we've increased our marketing investment from 7% of net sales to 25%. Our marketing investment is working, driving ROI multiples above industry benchmarks, even as we've taken our spending up. Since 2020, we've doubled our unaided awareness in the U.S. from 13% to 26%.
Speaker Change: Our marketing investment is working driving ROI multiples above industry benchmarks, even as we've taken our spending up.
Speaker Change: Okay.
Speaker Change: Since 2020, we've doubled our unaided awareness in the U S from 13% to 26%.
Speaker Change: Billie Jean King fact in Tommy.
Speaker Change: Women only make up 27% of U S corporate boards, yet there 47% of the work force. So broken can we fix it the bread or are there any quality.
Speaker Change: That 26% unaided awareness today compares to the leading U S mass cosmetics brand at 52% illustrating significant runway for growth.
Speaker Change: Complementing our financial performance of the past two decades I'm proud that we continue to lead with purpose as we strive to create a different kind of beauty company.
Speaker Change: Yes.
Speaker Change: Why not both and welcome aboard.
Tarang P. Amin: That 26% unaided awareness today compares to the leading U.S. mass cosmetics brand at 52%, illustrating significant runway for growth. Complimenting our financial performance of the past two decades, I'm proud that we continue to lead with purpose as we strive to create a different kind of beauty company. One that is purpose-led and results-driven. Out of nearly 4,200 public companies in the U.S., we're one of only four with a board that's at least two-thirds women and one-third diverse. A few weeks ago, we launched our biggest purpose-led initiative yet, Change the Board Game, encouraging companies to diversify their boards.
Speaker Change: Yeah.
Speaker Change: Sorry, I think I broke something else.
Speaker Change: That is purpose led and results driven.
Speaker Change: With our change the board game initiative, we aim to champion.
Speaker Change: Out of nearly 4200 public companies in the U S. We were one of only four with a board that is at least two thirds of women and one third diverse.
Speaker Change: Diversifying boardroom representation with a goal to double the annual growth rate of women and diverse candidates added to corporate boards.
Speaker Change: A few weeks ago, we launched our biggest purpose led initiatives yet changed the board game encouraging companies to diversify their boards.
Speaker Change: Turning now to fiscal 'twenty five let me touch on some of the initiatives we have planned to capitalize on the white space, we see in color cosmetics skincare and international.
Speaker Change: At Els, we stand for every eye lip and face, but that theory of inclusivity doesn't show up everywhere it should occur.
Speaker Change: First in color cosmetics, we ended fiscal 'twenty four with about a 10.5% market share more than double the level, we had four years ago and reach the number two brand rank in Q4 with 12.8% share.
Speaker Change: The company's board represent a stockholder and community. So if boards don't reflect the diversity of the real world real people get left behind in fact, there are more men on U S. Corporate boards named Richard Rich for Dec and entire groups underrepresented people that a lot of gigs and not enough of everyone else.
Tarang P. Amin: At e.l.f., we stand for every eye, lip, and face. But that spirit of inclusivity doesn't show up everywhere it should. A company's board represents its stockholders and communities. So, if boards don't reflect the diversity of the real world, real people get left behind. In fact, there are more men on U.S. corporate boards named Richard, Rich, or Dick than entire groups of underrepresented people. That's a lot of dicks and not enough of everyone else. That's why we're changing the board game. We believe seats at the table are for people of all ethnicities and genders.
Speaker Change: In target our longest standing national retail customer we are already the number one brand with over 19% share.
Speaker Change: That's why we're changing the board game, we believes needs at the table for people of all ethnicities and gender and our board approved do you know how many of the 4200 publicly traded companies in the U S can say that for that.
Speaker Change: We see an opportunity to double our share again over the next few years as we replicate our success at target across other key retailers.
Speaker Change: And target isn't standing still in fact, we expanded our market share target to 23% in Q4 growing our business by over 70% for the year.
Speaker Change: That's less than 1%.
Speaker Change: Having a boy that represent real people using just the right thing to do it's also good for the bottom line.
Speaker Change: We expect our productivity led model to help us earn additional space with our retail partners in fiscal 'twenty five.
Speaker Change: We're working to make sure more women and diverse meters are placed on corporate boards across the country and we invite other companies to join because together we can change the board game.
Tarang P. Amin: And our board is proof. Do you know how many of the 4,200 publicly traded companies in the U.S. can say that? Four.
Speaker Change: We're pleased to announce that we'll be expanding space for Els and fall 'twenty 'twenty four with Cvs. In addition to the previously announced space gains in spring 2024, with Cvs and in summer 2024 with Walmart.
Tarang P. Amin: That's less than 1%. Having a board that represents real people isn't just the right thing to do. It's also good for the bottom line. We're working to make sure more women and diverse leaders are placed on corporate boards across the country. And we invite other companies to join us. Because together, we can change the board game.
Speaker Change: We partnered with legendary tennis Star and equality champion Billie Jean King and created a series of video shorts spread awareness in a humorous way of the inequality on corporate boards.
Speaker Change: The second key area of White space, we see as in skincare.
Speaker Change: Okay.
Speaker Change: L skin today holds a 1.6% share and has significant runway with the number one brand holding over 14% share.
Speaker Change: Yes.
Speaker Change: Billie Jean King fact in Tommy.
Tarang P. Amin: We partnered with legendary tennis star and equality champion Billie Jean King and created a series of video shorts to spread awareness in a humorous way of the inequality on corporate boards.
Speaker Change: Women only make up 27% of U S. Corporate boards, yet there are 47% of the work force. So broken can we fix it the bread or are there any quality.
Speaker Change: We're excited about the innovation pipeline, we have for L skin, starting with in store launch of Bronzing drops this summer.
Speaker Change: With the acquisition of Natrium, we now have two of the fastest growing mass skincare brands that are complementary and their price points positioning and audiences.
Speaker Change: Why not both and welcome aboard.
Unknown Executive: Women only make up 27% of U.S. corporate boards.
Speaker Change: Yeah.
Speaker Change: Sorry, I think I've, we're putting emphasis.
Speaker Change: From a distribution standpoint in the U S. Mature them is currently available in target Amazon editorial dot com.
Speaker Change: With our changed the board game initiative, we aim to champion.
Speaker Change: Diversifying boardroom representation with a goal to double the annual growth rate of women and diverse candidates added to corporate boards.
Unknown Executive: For The Inequality.
Speaker Change: We're pleased to announce that we'll be launching a tory them in Ulta beauty for the first time in summer 2024.
Unknown Executive: Sorry, I think I broke something else.
Speaker Change: Turning now to fiscal 'twenty five let me touch on some of the initiatives we have planned to capitalize on the white space, we see in color cosmetics skincare and international.
Speaker Change: Third we see significant white space internationally.
Tarang P. Amin: With our Change the Board Game Initiative, we aim to champion... Diversifying Boardroom Representation with a goal to double the annual growth rate of women and diverse candidates added to corporate boards. Turning now to Fiscal 25, let me touch on some of the initiatives we have planned to capitalize on the white space we see in color cosmetics, skin care, and international. First, in color cosmetics, we ended fiscal 24 with about a 10.5% market share, more than double the level we had four years ago, and reached the number two brand rank in Q4 with a 12.8% share.
Speaker Change: Our international expansion strategy is anchored in partnering with leading beauty retailers to bring our brands to life in each country, we pursue.
First in color cosmetics, we ended fiscal 'twenty four with about a 10, 5% market share more than double the level. We had four years ago and reached the number two brand rank in Q4 with 12, 8% share.
Speaker Change: International accounted for 15% of our sales in fiscal 2024 as compared to our global peers that over 70% on average.
In Q4, we officially opened our first European office in London, furthering our commitment to grow our international business.
Speaker Change: In target our longest standing national retail customer we are already the number one brand with over 19% share.
Speaker Change: As we look to the year ahead, we see significant runway to continue to grow in our largest global markets.
Speaker Change: We see an opportunity to double our share again over the next few years as we replicate our success at target across other key retailers.
Speaker Change: Canada, where we're the number three brand and the U K, where we are the number four brand.
Speaker Change: We're pleased to announce that we'll be expanding space for Alf and fall 'twenty 'twenty four with superdrug in the U K.
Tarang P. Amin: In Target, our longest-standing national retail customer, we are already the number one brand with over a 19% share. We see an opportunity to double our share again over the next few years as we replicate our success at Target across other key retailers. Target isn't standing still.
Speaker Change: And target isn't standing still in fact, we expanded our market share target to 23% in Q4 growing our business by over 70% for the year.
Speaker Change: In addition to the previously announced space gains in spring 2024, with boots, and with shoppers drug Mart in Canada.
Speaker Change: We expect our productivity led model to help us earn additional space with our retail partners in fiscal 'twenty five.
Speaker Change: As we look to new geographies, we've seen success with our engagement model across social platforms, driving consumer demand well before we enter a particular country.
Tarang P. Amin: In fact, we expanded our market share at Target to 23% in Q4, growing our business by over 70% for the year. We expect our productivity-led model to help us earn additional space with our retail partners in Fiscal 25. We're pleased to announce that we'll be expanding space for e.l.f. in fall 2024 with CVS, in addition to previously announced space gains in spring 2024 with CVS and in summer 2024 with Walmart. The second key area of white space we see is in skincare. e.l.f.
Speaker Change: We're pleased to announce that we'll be expanding space for Els in fall 2024 with Cvs. In addition to the previously announced space gains in spring 2024, with Cvs and in summer 2024 with Walmart.
Speaker Change: Since we launch into glass, Italy last fall Alpha has been the number one brand across both mass and prestige.
Speaker Change: We saw this again in April when we launched in the Netherlands with autos with Alf becoming their number one brand.
Speaker Change: The second key area of White space, we see as in skincare.
Speaker Change: Al skin today holds a one 6% share and has significant runway with the number one brand holding over 14% share.
Speaker Change: We're also pleased to announce we will be launching elf with Sephora, Mexico. This fall.
Speaker Change: Marking the L brands first partnership with Sephora.
Speaker Change: We're excited about the innovation pipeline, we have for L skin, starting with in store launch of Bronzing drops this summer.
Speaker Change: In summary, it's truly an exciting time at health beauty.
Tarang P. Amin: Skin today holds a 1.6% share and a significant runway with the number one brand holding over 14%. We're excited about the innovation pipeline we have for e.l.f. Skin started with the in-store launch of bronzing drops this summer. With the acquisition of Naturium, we now have two of the fastest-growing masking care brands that are complementary in their price points, positioning, and audiences. From a distribution standpoint, in the U.S., Notorium is currently available in Target, Amazon, and Notorium.com. We're pleased to announce that we'll be launching Notorium in Ulta Beauty for the first time in summer 2024.
With the acquisition of nutrient we now have two of the fastest growing mass skincare brands that are complementary and their price points positioning and audiences.
Speaker Change: We've evolved over our 20 year history from a digitally native indie brands to an industry leader, reaching the number two rank in color cosmetics and rapidly growing in skincare.
Speaker Change: From a distribution standpoint in the U S. <unk> is currently available in target Amazon editorial dot com.
Speaker Change: Our value proposition powerhouse innovation and disruptive marketing engine has allowed us to drive exceptional consistent category leading growth.
Speaker Change: We're pleased to announce that we'll be launching tutorial and Ulta beauty for the first time in summer 2024.
Speaker Change: And with the significant white space, we see in color cosmetics skincare and international we believe we're in the early innings of unlocking the full potential for our brands.
Speaker Change: Third we see significant white space internationally.
Speaker Change: Our international expansion strategy is anchored in partnering with leading beauty retailers to bring our brands to life in each country, we pursue.
Speaker Change: I'll now turn the call over to Mandy.
Mandy Fields: Thank you to rang and.
Mandy Fields: I'm pleased to touch on the highlights of our fourth quarter and full year fiscal 'twenty four results as well as our initial outlook for fiscal 'twenty five.
Speaker Change: International accounted for 15% of our sales in fiscal 2024 as compared to our global peers that over 70% on average.
Tarang P. Amin: Third, we see significant white space internationally. Our international expansion strategy is anchored in partnering with leading beauty retailers to bring our brands to life in each country we pursue. International sales accounted for 15% of our sales in fiscal 2024 as compared to our global peers at over 70% on average.
Mandy Fields: Our fourth quarter results were outstanding Q.
Speaker Change: In Q4, we officially opened our first European office in London, furthering our commitment to grow our international business.
Mandy Fields: Q4, net sales grew 71% year over year, driven by broad based strength across national and international retailers as well as digital commerce.
Speaker Change: As we look to the year ahead, we see significant runway to continue to grow in our largest global markets.
Mandy Fields: Our net sales growth was led by higher unit volume, which contributed approximately 50 points to growth with mix, adding approximately 21 points.
Speaker Change: Canada, where we're the number three brand and the U K, where we're the number four brand.
Tarang P. Amin: In Q4, we officially opened our first European office in London, furthering our commitment to growing our international business. As we look to the year ahead, we see a significant runway to continue to grow in our largest global market. Canada, where we're the number three brand, and the UK, where we're the number four brand. We're pleased to announce that we'll be expanding our space for e.l.f. in fall 2024 with Superdrug in the UK.
Speaker Change: We're pleased to announce that we'll be expanding space for Alf in fall 2024 with superdrug in the U K.
Mandy Fields: Q4 digital consumption trends were up nearly 70% year over year.
Speaker Change: In addition to the previously announced space gains in spring 2024, with boots, and with shoppers drug Mart in Canada.
Mandy Fields: Digital channels drove 22% of our consumption in Q4 as compared to 18% a year ago.
Speaker Change: As we look to new geographies, we've seen success with our engagement model across social platforms, driving consumer demand well before we enter a particular country.
Mandy Fields: The momentum we're seeing is supported by enhancements across our loyalty program, our app as well as digital and social platforms.
Mandy Fields: Our beauty squad loyalty program now has over $4 8 million members with enrollment growing 30% year over year.
Tarang P. Amin: In addition to the previously announced base gains in spring 2024 with Boots and with Shoppers Drug Mart in Canada, as we look to new geographies, we've seen success with our engagement model across social platforms, driving consumer demand well before we enter a particular country. Since we launched in Douglas, Italy last fall, e.l.f. has been the number one brand across both mass and prestige. We saw this again in April when we launched in the Netherlands with Etos and e.l.f.
Speaker Change: Since we launched and do glass, Italy last fall Alpha has been the number one brand across both mass and prestige.
Speaker Change: We saw this again in April when we launched in the Netherlands with autos with <unk>, becoming their number one brand.
Mandy Fields: Our loyalty members continue to be a key part of our digital ecosystem driving almost 80% of our sales on F cosmetics dot com.
Speaker Change: We're also pleased to announce we'll be launching elf with Sephora, Mexico. This fall.
Tarang P. Amin: becoming their number one brand. We're also pleased to announce we'll be launching E.L.F. with Sephora Mexico this fall, marking the e.l.f. brand's first partnership with Sephora. In summary, it's truly an exciting time at e.l.f. Beauty. We've evolved over our 20-year history from a digitally native indie brand to an industry leader, reaching the number two rank in color cosmetics and rapidly growing in skin care. Our value proposition, powerhouse innovation, and disruptive marketing engine have allowed us to drive exceptional, consistent, category-leading growth.
Mandy Fields: We're seeing terrific engagement on our Alf mobile App, which now boast a four eight star rating and recently surpassed over 2 million downloads.
Speaker Change: Marking the L brands first partnership with Sephora.
Speaker Change: In summary, it's truly an exciting time at health beauty.
Mandy Fields: We're also enjoying strength across third party digital and social platforms.
Speaker Change: We've evolved over our 20 year history from a digitally native indie brand to an industry leader, reaching the number two rank in color cosmetics and rapidly growing in skincare.
Mandy Fields: Q4 gross margin of 71% was up approximately 180 basis points compared to prior year.
Mandy Fields: We saw gross margin benefits from favorable foreign exchange impacts.
Speaker Change: Our value proposition powerhouse innovation and disruptive marketing engine has allowed us to drive exceptional consistent category leading growth.
Price increases in our international markets.
Mandy Fields: Lower costs from retailer activity.
Mandy Fields: Cost savings and mix, partially offset by inventory adjustments.
Speaker Change: And with the significant white space, we see in color cosmetics skincare and international we believe we're in the early innings of unlocking the full potential for our brands.
Mandy Fields: We also saw a benefit from improved transportation costs, albeit to a much lesser extent than the prior three quarters as we began to annualize some of the benefits that flow through in Q4 of last year.
Speaker Change: I'll now turn the call over to Mandy. Thank.
Thank you to rang.
Mandy Fields: On an adjusted basis SG&A as a percentage of sales was 61% in Q4 compared to 61% last year.
Mandy: I'm pleased to touch on the highlights of our fourth quarter and full year fiscal 'twenty four results as well as our initial outlook for fiscal 'twenty five.
Tarang P. Amin: And with the significant white space we see in color cosmetics, skin care, and international, we believe we're in the early innings of unlocking the full potential for our brand. I'll now turn the call over to Mandy.
Mandy: Our fourth quarter results were outstanding.
Mandy Fields: Marketing and digital investments for the quarter was approximately 34% of net sales as compared to 33% last year.
Mandy: Q4, net sales grew 71% year over year, driven by broad based strength across national and international retailers as well as digital commerce.
Mandy J. Fields: I'm pleased to touch on the highlights of our fourth quarter and full year Fiscal 24 results, as well as our initial outlook for Fiscal 25. Our fourth quarter results were outstanding. Q4 net sales grew 71% year-over-year, driven by broad-based strength across national and international retailers, as well as digital commerce. Our net sales growth was led by higher unit volume, which contributed approximately 50 points to growth, with mix adding approximately 21 points.
Mandy Fields: During the quarter, we opportunistically stepped up our marketing investment given our better than expected top line trends.
Mandy: Our net sales growth was led by higher unit volume, which contributed approximately 50 points to growth with mix, adding approximately 21 points.
Mandy Fields: As a result, we ended the full year with marketing and digital investment at 25% of net sales above the high end of our 22% to 24% range that we had outlook.
Mandy: Q4 digital consumption trends were up nearly 70% year over year.
Mandy: Digital channels drove 22% of our consumption in Q4 as compared to 18% a year ago.
Mandy Fields: Q4, adjusted EBITDA was $41 million up 93% versus last year.
And adjusted EBITDA margin was 13% of net sales.
Mandy: The momentum we're seeing is supported by enhancements across our loyalty program, our app as well as digital and social platforms.
Mandy Fields: Adjusted net income was $31 million or <unk> 53 cents per diluted share compared to $24 million or <unk> 42 cents per diluted share a year ago.
Mandy J. Fields: Q4 digital consumption trends were up nearly 70% year over year. Digital channels drove 22% of our consumption in Q4 as compared to 18% a year ago. The momentum we're seeing is supported by enhancements across our loyalty program, our app, as well as digital and social platforms. Our Beauty Squad loyalty program now has over 4.8 million members, with enrollment growing 30% year over year.
Mandy: Our beauty squad loyalty program now has over $4 8 million members with enrollment growing 30% year over year.
Mandy Fields: The increase in adjusted net income was attributable to an increase in pre tax income as well as discrete tax benefits in the quarter related to stock based compensation.
Mandy: Our loyalty members continue to be a key part of our digital ecosystem driving almost 80% of our sales on F cosmetics dot com.
Mandy: We're seeing terrific engagement on our mobile App, which now boast a four eight star rating and recently surpassed over 2 million downloads.
Mandy Fields: Let's now turn to our full year results.
Mandy Fields: In fiscal 'twenty four we grew net sales by 77% and adjusted EBITDA by 101%, our strongest growth year ever.
Mandy J. Fields: Our loyalty members continue to be a key part of our digital ecosystem, driving almost 80% of our sales on e.l.f.cosmetics.com. We're seeing terrific engagement on our e.l.f. mobile app, which now boasts a 4.8 star rating and recently surpassed over 2 million downloads.
Mandy: We're also enjoying strength across third party digital and social platforms.
Mandy Fields: We invested behind our high ROI marketing and digital initiatives and delivered approximately 280 basis points of adjusted EBITDA margin expansion supported by the combination of our strong sales growth gross margin expansion and leverage in our non marketing SG&A expenses.
Mandy: Q4 gross margin of 71% was up approximately 180 basis points compared to prior year.
Mandy: We saw gross margin benefits from favorable foreign exchange impacts.
Mandy J. Fields: We're also enjoying strength across third-party digital and social platforms. Q4 gross margin of 71% was up approximately 180 basis points compared to the prior year. We saw gross margin benefits from favorable foreign exchange impact, price increases in our international market, and lower costs from retailer activity.
Price increases in our international markets.
Mandy: Lower costs from retailer activity.
Speaker Change: Moving to the balance sheet and cash flow.
Mandy: Cost savings and mix, partially offset by inventory adjustments.
Speaker Change: Our balance sheet remains strong and we believe positions us well to execute our long term growth plans.
Mandy: We also saw a benefit from improved transportation costs, albeit to a much lesser extent than the prior three quarters as we begin to annualize some of the benefits that flow through in Q4 of last year.
Speaker Change: We ended the quarter with $108 million in cash on hand, compared to a cash balance of $121 million a year ago.
Mandy J. Fields: Cost Savings and Mix Partially Offset by Inventory Adjustment We also saw a benefit from improved transportation costs, albeit to a much lesser extent than the prior three quarters, as we began to annualize some of the benefits that flowed through in Q4 last year, on an adjusted basis. SG&A as a percentage of sales was 61% in Q4 compared to 61% last year. Marketing and digital investment for the quarter was approximately 34% of net sales as compared to 33% last year.
Mandy: On an adjusted basis SG&A as a percentage of sales was 61% in Q4 compared to 61% last year.
Our ending inventory balance was $191 million in line with our expectations and up from $81 million a year ago.
Mandy: Marketing and digital investment for the quarter was approximately 34% of net sales as compared to 33% last year.
Speaker Change: The difference is primarily a combination of three things.
Speaker Change: First as we've said the past few quarters, we continue to build back our inventory levels to support strong consumer demand.
Mandy: During the quarter, we opportunistically stepped up our marketing investment given our better than expected top line trends.
Speaker Change: Second our consolidated results now include material, which added approximately $26 million of inventory.
Mandy: As a result, we ended the full year with marketing and digital investment at 25% of net sales above the high end of our 22% to 24% range that we had outlook.
Speaker Change: Lastly, an additional $8 million of the increase is the result of taking ownership of inventory from China when it ships versus when it enters our distribution center here in the U S.
Mandy J. Fields: During the quarter, we opportunistically stepped up our marketing investment given our better-than-expected top-line trend. As a result, we ended the full year with marketing and digital investment at 25% of net sales, above the high end of our 22 to 24% range that we had forecasted. Q4 Adjusted EBITDA was $41 million, up 93% versus last year. The adjusted EBITDA margin was 13% of net sales. Adjusted net income was $31 million, or $0.53 per diluted share, compared to $24 million, or $0.42 per diluted share, a year ago. The increase in adjusted net income was attributable to an increase in pre-tax income, as well as discrete tax benefits in the quarter related to stock-based compensation.
Mandy: Q4, adjusted EBITDA was $41 million of 93% versus last year and.
Speaker Change: Our liquidity position remains strong.
Mandy: And adjusted EBITDA margin was 13% of net sales.
Speaker Change: We ended the quarter with less than one times leverage in terms of net debt to adjusted EBITDA, We expect our cash priorities for fiscal 'twenty five to remain on investing behind our growth initiatives and supporting strategic extensions.
Mandy: Adjusted net income was $31 million or <unk> 53 cents per diluted share compared to $24 million or <unk> 42 cents per diluted share a year ago.
Speaker Change: The initiatives were focused on this year include continuing to invest in our people and infrastructure.
Mandy: The increase in adjusted net income was attributable to an increase in pre tax income as well as discrete tax benefits in the quarter related to stock based compensation.
Speaker Change: Our ERP transition to S P.
Speaker Change: As well as increased distribution capacity to support strong consumer demand.
Mandy: Let's now turn to our full year results.
Speaker Change: Now, let's turn to our initial outlook for fiscal 'twenty five.
Mandy: In fiscal 'twenty four we grew net sales by 77% and adjusted EBITDA by 101%, our strongest growth year ever.
Speaker Change: For the full year, we expect net sales growth of approximately 20% to 22%.
Mandy: We invested behind our high ROI marketing and digital initiatives and delivered approximately 280 basis points of adjusted EBITDA margin expansion supported by the combination of our strong sales growth gross margin expansion and leverage in our non marketing SG&A expenses.
Speaker Change: Adjusted EBITDA between $285 million to $289 million.
Mandy J. Fields: Let's now turn to our full year results. In fiscal 24, we grew net sales by 77% and adjusted EBITDA by 101%, our strongest growth year ever. We invested in our high ROI marketing and digital initiatives and delivered approximately 280 basis points of adjusted EBITDA margin expansion, supported by the combination of our strong sales growth, gross margin expansion, and leverage in our non-marketing SG&A expenses. Moving to the balance sheet and cash flow.
Speaker Change: Adjusted net income between 187 million to $191 million.
Speaker Change: And adjusted EPS at $3.20.
Speaker Change: To $3.25 per diluted share.
Mandy: Moving to the balance sheet and cash flow.
Speaker Change: We expect our fiscal 'twenty five adjusted tax rate to be approximately 20% to 21%.
Mandy: Our balance sheet remains strong and we believe positions us well to execute our long term growth plans.
Speaker Change: And a fully diluted average share count of approximately 59 million shares.
Mandy: We ended the quarter with $108 million in cash on hand, compared to a cash balance of $121 million a year ago.
Speaker Change: Let me provide you with additional color on our planning assumptions for fiscal 'twenty five.
Mandy: Our ending inventory balance was $191 million in line with our expectations and up from $81 million a year ago.
Mandy J. Fields: Our balance sheet remains strong, and we believe it positions us well to execute our long-term growth plan. We ended the quarter with $108 million in cash on hand, compared to a cash balance of $121 million a year ago. Our ending inventory balance was $191 million, in line with our expectations and up from $81 million a year ago. The difference is primarily a combination of three things.
Speaker Change: Starting with the top line.
Speaker Change: We ended the fiscal year with significant momentum and believe we are well positioned to deliver another year of volume led category leading growth.
Mandy: The difference is primarily a combination of three things.
Mandy: First as we've said the past few quarters, we continue to build back our inventory levels to support strong consumer demand.
Speaker Change: In Q1, we expect our net sales growth to come in well ahead of our 20% to 22% annual growth, reflecting the ongoing strong consumption trends we're seeing.
Mandy: Second our consolidated results now include material, which added approximately $26 million of inventory.
And the incremental contribution from the acquisition of material.
Speaker Change: As we look at track channels, we would expect trends for the Alf Rand to continue in the 20% range throughout the summer as we cycled strong compares in the base.
Mandy: Lastly, an additional $8 million of the increase is the result of taking ownership of inventory from China when it ships versus when it enters our distribution center here in the U S.
Mandy J. Fields: First, as we've said the past few quarters, we continue to build back our inventory levels to support strong consumer demand. Second, our consolidated results now include Noturium, which added approximately $26 million in inventory. Lastly, an additional $8 million of the increase is the result of taking ownership of inventory from China when it ships versus when it enters our distribution center here in the U.S. Our liquidity position remains strong. We ended the quarter with less than one times leverage in terms of net debt to adjusted EBITDA.
Speaker Change: Call chat channels represent approximately half of our net sales after accounting for the acquisition of material.
Mandy: Our liquidity position remains strong.
Mandy: We ended the quarter with less than one times leverage in terms of net debt to adjusted EBITDA, We expect our cash priorities for fiscal 'twenty five to remain on investing behind our growth initiatives and supporting strategic extensions.
Speaker Change: As we look out to the remainder of the year, we remain bullish on the cosmetics category and our ability to gain share.
At the same time, we are mindful of macroeconomic uncertainty and believe its prudent to take it a quarter at a time.
Mandy: The initiatives were focused on this year include continuing to invest in our people and infrastructure.
Speaker Change: Our guidance approach remains consistent serving us well as we've navigated a dynamic operating environment to deliver 21 consecutive quarters of net sales growth.
Mandy: Our ERP transition to S P.
Mandy J. Fields: We expect our cash priorities for Fiscal 25 to remain on investing behind our growth initiatives and supporting strategic extensions. The initiatives we're focused on this year include continuing to invest in our people and infrastructure, as well as our ERP transition to SAP.
Mandy: As well as increased distribution capacity to support strong consumer demand.
Mandy: Now, let's turn to our initial outlook for fiscal 'twenty five.
Speaker Change: Turning to gross margin.
Speaker Change: And fiscal 'twenty five we expect our gross margin to be up approximately 10 basis points year over year.
For the full year, we expect net sales growth of approximately 20% to 22%.
Speaker Change: We expect the first half to be relatively flat to prior year as we flow through higher transportation costs experienced with the Red Sea disruption at the end of last year.
Mandy J. Fields: As well as increased distribution capacity to support strong consumer demand. Now, let's turn to our initial outlook for Fiscal 25. For the full year, we expect net sales growth of approximately 20 to 22 percent and adjusted EBITDA between $285 million and $289 million. Adjusted net income between $187 million and $191 million, and an adjusted EPS of $3.20 to $3.25 per diluted share. We expect our fiscal 25 adjusted tax rate to be approximately 20 to 21 percent and a fully diluted average share count of approximately 59 million shares. Let me provide you with additional color on our planning assumptions for Fiscal 25. Starting with the top line,
Mandy: Adjusted EBITDA between $285 million to $289 million.
Mandy: Adjusted net income between $187 million to $191 million.
Speaker Change: We expect those cost to recover in the back half of the year.
Speaker Change: In terms of the key puts and takes for the year, we expect gross margin benefits from favorable FX rates.
Mandy: And adjusted EPS of $3.20.
Mandy: To $3.25 per diluted share.
Speaker Change: Margin accretive mix and cost savings to be partially offset by the transportation costs I, just noted and costs related to retailer activity and space expansion.
Mandy: We expect our fiscal 'twenty five adjusted tax rate to be approximately 20% to 21%.
Mandy: And a fully diluted average share count of approximately 59 million shares.
Speaker Change: With the combination of our top line momentum and ongoing strong ROI, we're seeing we're planning for marketing and digital investment at approximately 24% to 26% of net sales in fiscal 'twenty five as.
Mandy: Let me provide you with additional color on our planning assumptions for fiscal 'twenty five.
Mandy: Starting with the topline.
Mandy: We ended the fiscal year with significant momentum and believe we are well positioned to deliver another year of volume led category leading growth.
As compared to 25% in fiscal 'twenty four.
Speaker Change: We're investing from a position of strength and believe these marketing investments will continue to fuel our growth.
Mandy: In Q1.
Mandy: We expect our net sales growth to come in well ahead of our 20% to 22% annual growth, reflecting the ongoing strong consumption trends, we're seeing and the incremental contribution from the acquisition of material.
Speaker Change: From a cadence standpoint.
Mandy J. Fields: We end the fiscal year with significant momentum and believe we are well positioned to deliver another year of volume-led, category-leading growth. In Q1, we expect our net sales growth to come in well ahead of our 20-22% annual growth, reflecting the ongoing strong consumption trends we are seeing and the incremental contribution from the acquisition of Noturium. As we look at track channels, we would expect trends for the e.l.f. brand to continue in the 20% range throughout the summer as we cycle strong comparisons in the base.
Speaker Change: We are planning a more balanced pace of marketing and digital spend throughout fiscal 'twenty five.
Speaker Change: As a result, we expect our year over year adjusted EBITDA growth could be in the low to mid single digit range in the first half of our fiscal year with more material growth in adjusted EBITDA margin expansion to be realized in the second half of the year recall last year, we spent only 18% of sales but.
Mandy: As we look at track channels, we would expect trends for the Alf Rand to continue in the 20% range throughout the summer as we cycled strong compares in the base.
Mandy: Recall chat channels represent approximately half of our net sales after accounting for the acquisition of material.
Speaker Change: <unk> marketing in the first half of the year versus 30% of net sales in the second half.
Mandy: As we look out to the remainder of the year, we remain bullish on the cosmetics category and our ability to gain share.
Speaker Change: For the full year.
Speaker Change: Our outlook implies adjusted EBITDA growth of approximately 21% to 23% versus prior year on top of the strong 101% growth we delivered in fiscal 'twenty four.
At the same time, we are mindful of macroeconomic uncertainty and believe it is prudent to take it a quarter at a time.
Mandy J. Fields: Recall, track channels represent approximately half of our net sales after accounting for the acquisition of Noturium. As we look out to the remainder of the year, we remain bullish on the cosmetics category and our ability to gain share. But at the same time, we are mindful of macroeconomic uncertainty and believe it's prudent to take it a quarter at a time.
Mandy: Our guidance approach remains consistent serving us well as we've navigated a dynamic operating environment to deliver 21 consecutive quarters of net sales growth.
Speaker Change: Our outlook also implies adjusted EBITDA margin leverage of approximately 20 basis points year over year.
Speaker Change: Our flywheel approach of investing in marketing to drive top line, while expanding adjusted EBITDA margins gives me confidence in our ability to continue to drive profitable growth.
Mandy: Turning to gross margin.
In fiscal 'twenty five we expect our gross margin to be up approximately 10 basis points year over year.
Mandy J. Fields: Our guidance approach remains consistent, serving us well as we've navigated a dynamic operating environment to deliver 21 consecutive quarters of net sales growth. Turning to growth margin, In Fiscal 25, we expect our gross margin to be up approximately 10 basis points year-over-year. We expect the first half to be relatively flat to the prior year as we flow through higher transportation costs experienced with the Red Sea disruption at the end of last year. We expect those costs to recover in the second half of the year.
Mandy: We expect the first half to be relatively flat to prior year as we flow through higher transportation costs experienced with the Red Sea disruption at the end of last year.
Speaker Change: In summary.
Speaker Change: Our fourth quarter and fiscal 'twenty four results evidenced our ability to drive exceptional consistent.
Mandy: We expect those cost to recover in the back half of the year.
Speaker Change: Category leading growth.
Mandy: In terms of the key puts and takes for the year, we expect gross margin benefits from favorable FX rates margin accretive mix and cost savings to be partially offset by the transportation costs I, just noted and costs related to retailer activity and space expansion.
Speaker Change: We believe we have a winning strategy and remain excited about the significant white space opportunities in front of us.
Speaker Change: With that operator, you may open the call to questions.
Speaker Change: We will now begin the question and answer session to ask a question you May Press Star then one on your Touchtone phone.
Mandy J. Fields: In terms of the key puts and takes for the year, we expect gross margin benefits from favorable FX rates, margin-accretive mix, and cost savings to be partially offset by the transportation costs I just noted and costs related to retailer activity and space expansion. With the combination of our top line momentum and ongoing strong ROI we're seeing, we're planning for marketing and digital investment at approximately 24 to 26% of net sales in fiscal 25.
Mandy: With the combination of our top line momentum and ongoing strong ROI, we're seeing we're planning for marketing and digital investment at approximately 24% to 26% of net sales in fiscal 'twenty five.
Speaker Change: If youre using a speakerphone please pick up your handset before pressing the keys if at any time. Your question has been addressed and you would like to withdraw your question. Please press Star then two.
Speaker Change: Our first question comes from Andrea Teixeira with Jpmorgan. Please go ahead.
Mandy: As compared to 25% in fiscal 'twenty four.
Mandy: We're investing from a position of strength and believe these marketing investments will continue to fuel our growth.
Andrea Teixeira: Thank you and good afternoon, everyone. So I wanted to just decompose a bit the.
Speaker Change: The guide and I appreciate that you are.
Mandy: From a cadence standpoint.
Speaker Change: You'll always have been very conservative you just delivered three times the growth that you were expecting with amazing.
Mandy: We are planning a more balanced pace of marketing and digital spend throughout fiscal 'twenty five.
Mandy J. Fields: As compared to 25% in fiscal 24. We're investing from a position of strength and believe these marketing investments will continue to fuel our growth. From a cadence standpoint, we are planning a more balanced pace of marketing and digital spend throughout fiscal 25. As a result, we expect our year-over-year adjusted EBITDA growth to be in the low-to-mid single-digit range in the first half of our fiscal year, with more material growth and adjusted EBITDA margin expansion to be realized in the second half of the year.
Mandy: As a result, we expect our year over year adjusted EBITDA growth could be in the low to mid single digit range in the first half of our fiscal year with more material growth in adjusted EBITDA margin expansion to be realized in the second half of the year recall last year, we spent only 18% of sales.
Speaker Change: Companions and engagement by consumers as you highlighted so I was trying to see how much the 21% at the midpoint.
Speaker Change: With represent I understand that mainly you discuss there about half of your growth is coming from the fact that the U R. You were having.
Mandy: A high marketing in the first half of the year versus 30% of net sales in the second half.
Speaker Change: Having adding that tooling onto the to the base. So can you talk about a bit of how the pro forma should we expect the pro forma to behave if my math is correct is about about half of it is about 10% and how we should be thinking are the.
Mandy: For the full year.
Mandy: Our outlook implies adjusted EBITDA growth of approximately 21% to 23% versus prior year on top of the strong 101% growth we delivered in fiscal 'twenty four.
Mandy J. Fields: Recall, last year we spent only 18% of sales behind marketing in the first half of the year versus 30% of net sales in the second half. For the full year, our outlook implies adjusted EBITDA growth of approximately 21 to 23% versus the prior year, on top of the strong 101% growth we delivered in fiscal 24. Our outlook also implies adjusted EBITDA margin leverage of approximately 20 basis points year over year. Our flywheel approach of investing in marketing to drive the top line while expanding adjusted EBITDA margins gives me confidence in our ability to continue to drive profitable growth.
Speaker Change: The same as you did in the last few quarters, where we think about the Nielsen data and understandably. The Nielsen data is becoming less and less important for your growth less than 50% going forward, but just to think of how investors should should interpret those numbers.
Mandy: Our outlook also implies adjusted EBITDA margin leverage of approximately 20 basis points year over year.
Mandy: Our flywheel approach of investing in marketing to drive topline, while expanding adjusted EBITDA margins gives me confidence in our ability to continue to drive profitable growth.
Speaker Change: Thank you so much Andreas good to hear from you. So in terms of our guidance on the net sales side, we are guiding 20% to 22% net sales growth and we feel incredible about that that is building strength on strength on top of the 77% net sales growth year. We just delivered in fiscal 'twenty four so we actually feel great about our guide.
Mandy: In summary.
Mandy: Our fourth quarter and fiscal 'twenty four results evidenced our ability to drive exceptional consistent.
Speaker Change: And how that breaks down I would say that this guidance.
Mandy: Category leading growth.
Mandy: We believe we have a winning strategy and remain excited about the significant white space opportunities in front of us.
Speaker Change: Implies that our growth is going to continue to be unit led.
Speaker Change: We talked about being the number one unit share growth number one unit share brand in Nielsen data. Our Nielsen data continues to go very strong we've outlook that Nielsen should continue to perform in the twenties range as we've seen and in Additionally for Q1. We've also indicated that we expect to be.
Mandy J. Fields: In summary, our fourth quarter and fiscal 24 results evidence our ability to drive exceptional, consistent, Category Leading Growth. We believe we have a winning strategy and remain excited about the significant white space opportunities in front of us. With that, Operator, you may open the call to questions.
Speaker Change: With that operator, you may open the call to questions.
Speaker Change: We will now begin the question and answer session to ask a question you May Press Star then one on your Touchtone phone.
Speaker Change: If youre using a speakerphone please pick up your handset before pressing the keys if at any time. Your question has been addressed and you would like to withdraw your question. Please press Star then two.
Speaker Change: Above that 20% to 22% net sales guidance range and so feel really great about what we're seeing in the near term and as you mentioned on the guidance strategy. We have been very consistent in our guidance strategy in that approach has worked very well for us. So we like to take it a quarter at a time and I can tell you what we're seeing for Q1 we.
Operator: We will now begin the question and answer session. To ask a question, you may press star, then one on your touchtone phone. If you're using a speakerphone, please pick up your handset before pressing the keys. If at any time your question has been answered and you would like to withdraw your question, please press star, then two.
Speaker Change: Our first question comes from Andrea Teixeira with Jpmorgan. Please go ahead.
Andrea Faria Teixeira: Thank you and good afternoon, everyone. So I wanted to just decompose a bit the.
Speaker Change: Were really are pleased with and again, we'll take it one quarter at a time.
Andrea Faria Teixeira: The guide and I appreciate that you are.
Speaker Change: You'll always have been very conservative you just delivered three times the growth that you were expecting with amazing.
Speaker Change: And to answer your question on the experience material near term will be incremental for the first half of the year as they.
Andrea Faria Teixeira: Thank you and good afternoon everyone. So I wanted to just decompose the guide a bit, and I appreciate that you have always been very conservative. You just delivered three times the growth that you were expecting with amazing campaigns and engagement by consumers, as you highlighted. So I was trying to see how much the 21% at the midpoint would represent. I understand that, Mandy, you discussed about half of your growth coming from the fact that you were adding Naturium to the base. So can you talk about a bit of how the proforma, should we expect the proforma to behave?
Speaker Change: Campaigns and engagement by consumers as you highlighted so was trying to see how much the 21% at the midpoint.
Speaker Change: They were not in our base period.
Speaker Change: And so when you take the Nielsen data plus net carry them and what we have outside of Untracked, that's where we get to.
Speaker Change: With represent I understand that mainly you just got to stay at about half of your growth is coming from the fact that the U R. You were having.
Speaker Change: A rate that is above that 20% to 22% as we look at Q1.
Speaker Change: And then if I can just add to that so that implies that the second half of the fiscal year.
Speaker Change: Having adding that tooling onto the to the base. So can you talk about a bit of how the pro forma should we expect the pro forma to behave if my math is correct is about about half of it is about 10% and how we should be thinking are the.
Speaker Change: Then b kind of running in the in the high single digits is that how we should be thinking to get to that to that number.
Speaker Change: Yeah, when we look out on the year again, we feel great about the full year performance that were out looking we don't give quarter to quarter guidance, but as I mentioned earlier, our guidance approach is to take it a quarter at a time so right.
Speaker Change: The same as you did in the last few quarters, where we think about the Nielsen data and understandably. The Nielsen data is becoming less and less important for your growth less than 50% going forward, but just to think of how investors should should interpret those numbers.
Speaker Change: Right now we feel great about what we're seeing for Q1 and again expect that to be above our full year guidance range and we will take it a quarter at a time.
Mandy J. Fields: If my math is correct, it's about half of that; it's about 10%. And how we should be thinking, same as you did in the last few quarters where we think about the Nielsen data. Understandably, the Nielsen data is becoming less and less important for your growth, less than 50% going forward, but just to think about how investors should interpret those numbers.
Andreas: Thank you so much Andreas good to hear from you. So in terms of our guidance on the net sales side, we are guiding 20%, 22% net sales growth and we feel incredible about that that is building strength on strength on top of the 77% net sales growth year. We just delivered in fiscal 'twenty four so we actually feel great about our guide.
Speaker Change: Thank you Mandy I'll pass it on.
Andrea Teixeira: Yes, Thanks Andrea.
Speaker Change: Next question comes from Ashley <unk> with Jefferies. Please go ahead.
Speaker Change: Related to your question.
Speaker Change: Especially from the international markets.
Mandy J. Fields: Andrea, good to hear from you. So in terms of our guidance on the net sales side, we are guiding 20 to 22% net sales growth, and we feel incredible about that. That is building strength on strength on top of the 77% net sales growth year we just delivered in fiscal 24. So we actually feel great about our guidance. And how that breaks down, I would say that this guidance implies that our growth is going to continue to be unit led.
Speaker Change: Impressive maybe you can talk a little bit about the brand awareness that you're seeing in international markets that you currently don't fall product in how much of your social contact is consumed outside your core markets and then remind us what the pacing of international expansion.
Andreas: And how that breaks down I would say that this guidance.
Andreas: Implies that our growth is going to continue to be unit led.
Andreas: We talked about being the number one unit share growth number one unit share brand in Nielsen data. Our Nielsen data continues to go very strong we've outlook that Nielsen should continue to perform in the twenties range as we've seen and in Additionally for Q1. We've also indicated that we expect to be.
Speaker Change: We should kind of expect in the medium term.
touring: Hi, Ashley this is touring we're extremely pleased with the progress we're making in international I think for the quarter. We grew international of 115% primarily off of our first two countries, Canada and the U K, where we continue to increase rank what are the things. We found as we started expanding the brand is a.
Mandy J. Fields: We talked about being the number one unit share growth brand in Nielsen data. Our Nielsen data continues to go very strong. We've outlook that Nielsen should continue to perform in the 20s range, as we've seen.
Andreas: Above that 20% to 22% net sales guidance range and so feel really great about what we're seeing in the near term and as you mentioned on the guidance strategy. We have been very consistent in our guidance strategy and that approach has worked very well for us. So we like to take it a quarter at a time and I can tell you what we're seeing for Q1 we.
touring: Tremendous amount of pent up demand for the brand and it really comes from much of our social feed and social strength in the U S is consumed outside the U S. So a few months ago. When we launched in two glass, Italy, we not only what alliance out down the block for when we opened but we quickly rose to the number one brand in <unk>.
Andreas: Were really are pleased with and again, we'll take it one quarter at a time.
Andreas: And to answer your question on Nycturia material near term will be incremental for the first half of the year as they.
touring: Italy, not only in Nash, but across prestige. We recently found the same thing when we went into <unk> in the Netherlands were not even complete with a rollout there I think the rollout gets completed in July but we're already there number one brand in cosmetics. So what we're finding is consumers internationally are waiting for els, while we enter the market.
Andreas: They were not in our base period.
Andreas: And so when you take the Nielsen data plus <unk> and what we have outside of Untracked, that's where we get to.
Speaker Change: Great that is above that 20% to 22% as we look at Q1.
Speaker Change: And then if I can just add to that so that implies that the second half of the fiscal year.
We see this tremendous excitement.
touring: And so and then in terms of cadence I feel like each quarter, you're going to hear about us talk about another country. We're very pleased to talk about.
Speaker Change: Then b kind of running in the in the high single digits is that how we should be thinking to get to that to that number.
touring: Partnering with Sephora to enter Sephora, Mexico, It's our first entry in Latam and we're really excited of what that can open up for us in other sephora markets around the world and we continue to have really great conversations with other retailers as we map out that strategy. So I think you can expect the same discipline.
Speaker Change: Yeah, when we look out on the year again, we feel great about the full year performance that were out looking we don't give quarter to quarter guidance, but as I mentioned earlier, our guidance approach is to take it a quarter at a time so right.
Speaker Change: Right now we feel great about what we're seeing for Q1 and again expect that to be above our full year guidance range and we'll take it a quarter at a time.
Mandy J. Fields: And additionally, for Q1, we've also indicated that we expect to be above that 20 to 22% net sales guidance range. And so, we feel really great about what we're seeing in the near term. And as you mentioned about the guidance strategy, we have been very consistent in our guidance strategy, and that approach has worked very well for us. So we like to take it a quarter at a time. And I can tell you what we're seeing for Q1. We're really pleased with it.
touring: <unk> rollout strategy as you saw within the U S. As you've seen us approach with Canada, and the U K, where we start with a leading retailer and then go deeper in the market.
Speaker Change: Thank you Mandy I'll pass it on.
Speaker Change: Yes, Thanks Andrea.
Speaker Change: Next question comes from Ashley <unk> with Jefferies. Please go ahead.
Speaker Change: Great. Thanks, so much.
Speaker Change: The next question comes from Dara <unk> with Morgan Stanley. Please go ahead.
Speaker Change: Hi, This is one more question.
Speaker Change: With respect to kind of the international markets is very impressive maybe you can talk a little bit about the brand awareness you're seeing in international markets that you currently don't fall product and how much of your social contact is consumed outside your core markets and then remind us what the pacing of international expansion that we should kind of expect in the medium term.
Mandy J. Fields: And again, we'll take it one quarter at a time. And to answer your question on Noturium, Noturium will be incremental for the first half of the year as it was not in our base period, and so when you take the Nielsen data plus Noturium and what we have outside of UNTRACT, that's where we get to a rate that is above that 20 to 22% as we look at Q1.
Speaker Change: Hey, guys.
Dara <unk>: So just wanted to get a bit more detail on the topline guidance for fiscal 'twenty five.
Mandy J. Fields: And then if I can just add to that, so that implies that the second half of the fiscal year would then be kind of running in the high single digits. Is that how we should be thinking to get to that number?
Speaker Change: Mentioned, you're still optimistic on category growth and the momentum in Q1.
Speaker Change: But assume a slowdown in the balance of the year post Q1 on macros. So can you just give us a bit more detail on what you're seeing near term in the categories. So far in fiscal Q1, given the ultra comments and some of the worries out there.
touring: Hi, Ashley this is touring we're extremely pleased with the progress we're making in international I think for the quarter. We grew international 115% primarily off of our first two countries, Canada and the UK, where we continue to increase rank what are the things. We found as we started expanding the brand is.
Speaker Change: And then the balance of your slowdown is that just macros and how do you think about that relative to what you're seeing so far in Q1.
Mandy J. Fields: When we look out on the year, again, we feel great about the full-year performance that we're looking at. We don't give quarter-to-quarter guidance, but as I mentioned earlier, our guidance approach is to take it a quarter at a time. So right now, we feel great about what we're seeing for Q1, and again, expect that to be above our full-year guidance range. And we'll take it a quarter at a time.
Speaker Change: Hi, Dara. This is trying I'll take the first part I'll take the fruit category view and then ill, let Mandy talk about the cadence on the guidance.
Tremendous amount of pent up demand for the brand and it really comes from much of our social feed and social strength in the U S is consumed outside the U S. So a few months ago. When we launched in two glass, Italy, we not only what aligns up or down the block for when we opened but we quickly rose to the number one brand in Italy.
Unknown Executive: Thank you, Mandy. I'll pass it on. Yeah, thanks, Andrea. The next question comes from Ashley Helgans with Jeffries. Please go ahead. I think the answer to your question, um, this was such a kind of international market kitchen.
Speaker Change: Overall on the category I would tell you that we remain bullish on the color cosmetics category I know theres been conversation recently on mass color is slowing down but even if you look at the our Q4 mass color was down 3%, but what people don't recognize that a year ago period was up 18%. So the category actually NTT.
Unknown Executive: Andrea. The next question comes from Ashley Helgans with Jeffries. Please go ahead. I think your question
Tarang P. Amin: Hi, Ashley, this is Tarang. We're extremely pleased with the progress we're making in international trade. I think for the quarter, we grew 115% internationally, primarily in our first two countries, Canada and the UK, where we continue to increase rank. One of the things we found as we started expanding the brand is there's a tremendous amount of pent-up demand for the brand. And it really comes from that much of our social feed and social strength in the US is consumed outside the US.
touring: Really not only in Nash, but across the stage. We recently found the same thing when we went into <unk> in the Netherlands were not even complete with a rollout there I think the rollout gets completed in July but we're already there number one brand in cosmetics. So what we're finding is consumers internationally are waiting for els, while we enter the market.
Tarang P. Amin: So a few months ago, when we launched in Douglas, Italy, not only were there lines down the block when we opened, but we quickly rose to the number one brand in Italy, not only in mass but across prestige. We recently found the same thing when we went into Etos in the Netherlands. We're not even complete with our rollout there. I think the rollout gets completed in July, but we're already their number one brand in cosmetics.
Speaker Change: Year stacked basis is doing quite well even in the quarter were currently in the two year stack is plus five on mass color. So the category itself, we still feel really great about it.
Speaker Change: And then in terms of some of those and then within the category, we are particularly well positioned if you take a look at our history over the last 21 quarters, regardless of the pandemic container imbalances wherever the category was we've proven the ability to grow our net sales and market share quarter after quarter, even with some of the commentary.
See this tremendous excitement.
touring: And so and then in terms of cadence.
touring: Feel like each quarter, you're going to hear about us talk about another country. We're very pleased to talk about.
touring: Partnering with Sephora to enter Sephora, Mexico, It's our first entry in Latam and we're really excited of what that can open up for us and other software markets around the world.
Tarang P. Amin: So what we're finding is that consumers internationally are waiting for e.l.f. When we enter the market, you see this tremendous excitement. And then in terms of cadence, I feel like each quarter you're going to hear us talk about another country. We're very pleased to talk about us partnering with Sephora to enter Sephora Mexico. It's our first entry into LATAM, and we're really excited about what that can open up for us in other Sephora markets around the world.
Speaker Change: We recently by some of the retailers I know some of the ultra commentary.
touring: We continue to have really great conversations with other retailers as we map out that strategy. So I think you can expect the same disciplined sequential rollout strategy as you saw within the U S. As you've seen us approach with Canada, and the U K, where we start with a leading retailer and then go deeper in the market.
I can't talk about their overall commentary what I can tell you is in fiscal 'twenty four we grew our ultra business, 80% well above the overall growth rates were.
Speaker Change: Even target, which target did call out today beauty being a bright spot our target business was up 70% last year. So we feel really great in terms of where we're positioned and the strength, we're seeing across every one of our channels, including digital.
Tarang P. Amin: And we continue to have really great conversations with other retailers as we map out that strategy. So I think you can expect the same disciplined, sequential rollout strategy as you saw within the U.S., as you've seen us approach with Canada and the U.K., where we start with the leading retailer and then go deeper in the market.
Speaker Change: Great. Thanks, so much.
Speaker Change: The next question comes from Dara <unk> with Morgan Stanley. Please go ahead.
Dara <unk>: And then I'll take the second part Dara on the just the guidance philosophy and so if I take you back to last year last year, we started our guidance at 22% to 24% range ended the year at 77% that I'm, not saying that we're promising 77% this year for sure, but what I will say is that it gives you a little bit of insight.
Speaker Change: Hey, guys.
Speaker Change: So just wanted to get a bit more detail on the topline guidance for fiscal 'twenty. Five you mentioned, you're still optimistic on category growth and the momentum in Q1.
Dara Warren Mohsenian: The next question comes from Dara Mohsenian with Morgan Stanley. Please go ahead.
Speaker Change: But assume a slowdown in the balance of the year post Q1 O macros. So can you just give us a bit more detail on what you're seeing near term in the category. So far in fiscal Q1, given the ultra comments and some of the worries out there and then the balance of your slowdown is that just macros and how do you think about that relative to what you're seeing so far.
Speaker Change: Into our guidance philosophy, and what <unk>.
Unknown Executive: Hey guys, just wanted to get a bit more detail on the top line guidance for fiscal 25. You mentioned you're still optimistic about category growth and the momentum in Q1, but assume a slowdown in the balance of the year post Q1 on macros. So can you just give us a bit more detail on what you're seeing near term in the category so far in fiscal Q1, given the ulticomments and some of the worries out there, and then the balance of your slowdown? Is that just macros? And how do you think about that relative to what you're seeing so far in Q1?
Speaker Change: Has worked well for us over these last five years, taking it one quarter at a time, which is why we indicated that we do love the momentum that we're seeing out of Q1 and feel great about our overall guidance range at this point.
Okay, and just a follow up I guess, a similar question around your market share specifically it sounds like you don't necessarily want to assuming the momentum continues going forward given that it's such a strong level of momentum you can sort of.
Speaker Change: In Q1.
Speaker Change: Hi, Dara. This is trying I'll take the first part I'll take the fruit category view and then let Mandy talk about the cadence on the guidance overall on the category I would tell you that we remain bullish on the color cosmetics category I know theres been conversation recently on mass color is slowing down, but even if you look at the <unk>.
Speaker Change: Assume that continues quarter after quarter is that more of the right way to think about implied market shares floated out after Q1 or are there some specific points, maybe that would impact your market share just as we think about the quarterly cadence.
Tarang P. Amin: Hi Dara, this is Tarang.
Mandy: Q4 mass color was down 3%, but what people don't recognize is that a year ago period was up 18%. So the category actually on a two year stacked basis is doing quite well even in the quarter were currently in the two year stack is plus five on mass color. So the category itself, we still feel really great about.
Tarang P. Amin: I'll take the first part, or I'll take the category view and then let Mandy talk about the cadence on the guidance. You know, overall on the category, I would tell you that we remain bullish on the color cosmetics category. I know there's been conversation recently on mask color slowing down, but even if you look at the RQ4, mask color was down 3%, but what people don't recognize is that a year ago, it was up 18%. So the category, actually, on a two-year stack basis, is doing quite well. Even in the quarter we're currently in, the two-year stack is plus five on mask color.
Speaker Change: Yeah Dara on market share, we remain very bullish as similar to what Randy just said on our guidance strategy overall, we take it a quarter at a time. So we're not implying any slowdown. It's we're just not passing that through till we see Q1 come in and at that time similar to what we did last year actually the last number of years, we tend to take up.
Mandy: And then in terms of some of them and then within the category, we are particularly well positioned if you take a look at our history over the last 21 quarters, regardless of the pandemic container imbalances wherever the category was we've proven the ability to grow our net sales and market share quarter after quarter, even with some of.
Speaker Change: Our guidance, depending on how the it came out and intend to continue to carry that forward same on market share I am pleased with the over 300 basis points of market share. We grew this past year.
Tarang P. Amin: So the category itself, we still feel really great about it. And then within the category, we're particularly well positioned. If you take a look at our history over the last 21 quarters, regardless of the pandemic, container imbalances, wherever the category was, we've proven the ability to grow our net sales and market share quarter after quarter. Even with some of the commentary recently by some of the retailers, I know some of the Ulta commentary, you know, I can't talk about their overall commentary.
Speaker Change: First time that we passed l'oreal Paris, the number two spot with a 12, 8% market share first time, we passed maybelline for the number one unit share.
Mandy: The commentary recently by some of the retailers I know some of the ultra commentary.
Mandy: Talk about the overall commentary what I can tell you is in fiscal 'twenty four we grew our ultra business, 80% well above the overall growth rates were.
Speaker Change: Sure and then at target, which we always call out our longest standing national retail customer not only we the number one brand, but we accounted for in our Q4, 23% of their entire category growth. So we remain very confident in our ability to continue to grow market share overtime doubling our market share in color cosmetics skincare.
Tarang P. Amin: What I can tell you is, in fiscal 24, we grew our Ulta business 80%, well above where their overall growth rates were. Even Target, which Target did call out today, beauty being a bright spot, our Target business was up 70% last year. So we feel really great in terms of where we're positioned and the strength we're seeing across every one of our channels, including digital.
Mandy: Even target, which target did call out today beauty being a bright spot our target business was up 70% last year. So we feel really great in terms of where we're positioned and the strength, we're seeing across every one of our channels, including digitally.
Speaker Change: <unk> is even a bigger opportunity given the white space, we see there. So I would I would take a look at kind of our current trends and market share.
Mandy: And then I'll take the second part Dara on the just the guidance philosophy and so if I take you back to last year last year, we started our guidance at 22% to 24% range ended the year at 77% that I'm, not saying that we're promising 77% this year for sure, but what I will say is that gives you a little bit of insight and.
Speaker Change: Don't see anything that would indicate that would slow down in terms of our ability to continue to take share.
Speaker Change: Great. That's very helpful. Thank you.
Speaker Change: Yeah.
Mandy J. Fields: And then I'll take the second part, Dara, on just the guidance philosophy. And so if I take you back to last year, last year, we started our guidance at a 22 to 24% range and ended the year at 77%. I'm not saying that we're promising 77% this year for sure. But what I will say is that it gives you a little bit of insight into our guidance philosophy. And what, you know, has worked well for us over these last five years is taking it one quarter at a time. Which is why we indicated that we do love the momentum that we're seeing out of Q1 and feel great about our overall guidance range at this point.
Speaker Change: The next question comes from Olivia Tong with Raymond James. Please go ahead.
Mandy: Our guidance philosophy and what has.
Olivia Tong: Thanks, Good afternoon.
Mandy: It has worked well for us over these last five years, taking it one quarter at a time, which is why we indicated that we do love the momentum that we're seeing out of Q1 and feel great about our overall guidance range at this point.
Olivia Tong: And congrats on the growth you can be sure pretty phenomenal.
Olivia Tong: You mentioned, a number of upcoming shelf space expansion the launch notorious Alta and score in Mexico for where else can you give us a sense of the shelf space that you will get for that and then whether it sounds like those launches and shelf space gains.
Speaker Change: Okay, and just a follow up I guess, a similar question around your market share specifically it sounds like you don't necessarily want to assuming the momentum continues going forward. Given you had such a strong level of momentum you can sort of assume that continues quarter. After quarter is that more of the right way to think about implied.
Speaker Change: In existing retailers isn't embedded in the outlook beyond Q1. So if you could just give a little bit of color behind that.
Unknown Executive: Okay, and just to follow up, I guess a similar question around your market share specifically, it sounds like you don't necessarily want to assume the momentum continues going forward. Given you've added such a strong level of momentum, you can't sort of assume that continues quarter after quarter. Is that more the right way to think about implied market share slowing down after Q1? Or are there some specific points that could impact your market share just as we think about the quarterly K-10?
Speaker Change: Market shares float out after Q1 or are there some specific points, maybe that would impact your market share just as we think about the quarterly cadence.
Speaker Change: A couple of times, obviously that that you'll take it one quarter at a time. So does that also not assumed in that 20% to 22% growth the.
Speaker Change: Additions at the retail shelf space that you'll be getting.
Speaker Change: Yeah Dara on market share, we remain very bullish as similar to what Randy just said on our guidance strategy overall, we take it a quarter at a time. So we're not implying any slowdown. It's we're just not passing that through till we see Q1 come in and at that time similar to what we did last year actually the last number of years, we tend to take up.
Shrank: Hi, Olivia this is shrank so we feel great about the cadence of space that we're gaining with customers I'll remind you most of our growth comes from a productivity model the strong productivity with delivery with every customer being the number one most productive brand most of our major retailers carry that in turn reward.
Tarang P. Amin: Yeah, Dara, on market share, we remain very bullish. Similar to what Mandy just said about our guidance strategy overall, we take it a quarter at a time. So we're not implying any slowdown, it's just we're just not passing that through till we see Q1 come in.
Speaker Change: Our guidance, depending on how the it came out and intend to continue to carry that forward same on market share I am pleased with the over 300 basis points of market share. We grew this past year.
Shrank: Words, such as more space. So our guidance right now if I think of space gains really incorporates in the Walmart space that we will pick up in the summer and additional Cvs space in the fall in the U S. And then outside the U S. Obviously, we talked about.
Tarang P. Amin: And at that time, similar to what we did last year, actually, the last number of years, we tend to take up our guidance depending on how it came out and then kind of continue to carry that forward. Same on market share. I'm pleased with the over 300 basis points of market share we grew this past year, and it was the first time that we passed L'Oreal Paris, the number two spot with a 12.8% market share.
Speaker Change: First time that we passed l'oreal Paris, the number two spot with a 12, 8% market share first time, we passed maybelline for the number one unit share.
Shrank: Superdrug expanding space. In addition to the boots, and then for Mexico as well as notorious here with Ulta beauty, which we're very excited about our first time with notorious that customer.
Speaker Change: Sure and then at target, which we always call out our longest standing national retail customer not only we the number one brand, but we accounted for in our Q4, 23% of their entire category growth. So we remain very confident in our ability to continue to grow market share overtime doubling our market share in color cosmetics skincare for.
Shrank: Certainly for a future space gains, we'll announce those in subsequent quarters. So the 20% to 22% does not incorporate what we may expect in terms of future space gains and again, we stand in a really strong spot just gave you the overall strength of our productivity model.
Tarang P. Amin: For the first time, we passed Maybelline for the number one unit share. And then at Target, which we always call our longest-standing national retail customer, not only were we the number one brand, but we accounted for, in our Q4, 23% of their entire category growth. So we remain very confident in our ability to continue to grow market share over time, doubling our market share in color cosmetics, and skincare perhaps is even a bigger opportunity, given the white space we see there. So I would take a look at kind of our current trends in market share, and we don't see anything that would indicate that we would slow down in terms of our ability to continue to take share.
Speaker Change: <unk> is even a bigger opportunity given the white space, we see there. So I would I would take a look at kind of our current trends and market share and we don't see anything that would indicate that would slow down in terms of our ability to continue to take share.
Shrank: Sure.
Speaker Change: Got it and I don't know if you want to talk about the magnitude of space gains that are getting at Ulta wouldn't vitoria more into core in Mexico, but if you can give any color on that and then just in terms of follow up it sounds like inventory and so on great and I just wanted to get a view on your on your view your view excuse me on.
Speaker Change: Great. That's very helpful. Thank you.
Yeah.
Speaker Change: The next question comes from Olivia Tong with Raymond James. Please go ahead.
Olivia Tong Cheang: Thanks, Good afternoon, and congrats on the growth you've seen this year pretty phenomenal.
Speaker Change: The long term opportunity for potentially other retailer international.
Unknown Executive: Great. That's very helpful. Thank you.
Speaker Change: You mentioned, a number of upcoming shelf space expansion, the launching their corium at Alta and scorer in Mexico four for Els.
Speaker Change: How this excess inventory influences, how you think about M&A overall going forward. Thank you.
Olivia Tong Cheang: The next question comes from Olivia Tong with Raymond James. Please go ahead.
Speaker Change: Yes.
Speaker Change: Can you give us a sense of the shelf space that you will get for that and then whether it sounds like those launches and shelf space gains.
Speaker Change: So I'd say the magnitude of the space gains we feel really good about we havent been disclosing exactly the space gains look like so you're going to have to wait till you see Walmart and sephora in some of these other customers, but we've made continued improvements in our presentation visual merchandising in stores and we feel really good about what those sets look like and then in terms of.
Tarang P. Amin: Thanks, good afternoon, and congrats on the growth you achieved this year, pretty phenomenal. You mentioned a number of upcoming shelf space expansions, the launch of Notorium at Alta and Inscore in Mexico for e.l.f., can you give us a sense of the shelf space that you'll get for that, and then whether, it sounds like those launches and shelf space gains in existing retailers isn't embedded in the outlook beyond Q1, so if you could just give a little bit of color behind that, you mentioned a couple of times obviously that you'll take it one quarter at a time, so does that also not assume in that 20 to 22% growth the additions of the retail shelf space that you'll be getting?
Speaker Change: In the existing retailers isn't embedded in the outlook beyond Q1. So if you could just give a little bit of color behind that you mentioned a couple of times, obviously that you'll take it one quarter at a time. So does that also not assumed in that 20% to 22% growth the.
Speaker Change: Torreon, specifically, we feel great with the progress, we're making with Victoria. The team is doing an incredible job not only in terms of mapping out distribution gains, but also in the overall consumer engagement model and a terrific pipeline of innovation. So we're quite bullish in Victoria and its future.
Speaker Change: Additions of the the retail shelf space that you will be getting.
Shrank: Hi, Olivia this is shrank so we feel great about the cadence of space that we're gaining with customers I'll remind you most of our growth comes from our productivity model the strong productivity with delivery with every customer being the number one most productive brand most of our major retailers carry that in turn rewards.
Speaker Change: When you look at the distribution footprint standpoint, I would say we continue to be.
Speaker Change: Perform extremely well at target.
Speaker Change: The terms main customer and play it taking from the Elf playbook as we expand it to other customers. We continue to strengthen our business at target. We plan to do the exact same thing here, saying, we have strength in Amazon.
Tarang P. Amin: Hi Olivia, this is Trang. So we feel great about the amount of space that we're gaining with customers. You know, I'll remind you, most of our growth comes from our productivity model, the strong productivity we deliver with every customer being the number one, most productive brand that most of our major retailers carry, that in turn rewards us with more space. So our guidance right now, if I think of space gains, really incorporates the Walmart space that we will pick up in the summer and additional CVS space in the fall in the U.S. And then outside the U.
Shrank: More space. So our guidance right now if I think of space gains really incorporates in the Walmart space that we will pick up in the summer and additional Cvs space in the fall in the U S. And then outside the U S. Obviously, we talked about.
Speaker Change: Alta is particularly excited about the launch for <unk> and then if I look internationally, that's really wide open outside of shoppers drug Mart and space N K, where we can leverage a lot of what with the momentum we're seeing internationally on the trillium as well.
Shrank: Superdrug expanding space. In addition to the boots, and then just for Mexico as well as notorious here with Ulta beauty, which we're very excited about our first time with notorious that customer.
Speaker Change: And then from an M&A standpoint Olivia.
Speaker Change: We're really focused on the brands that we have in our portfolio today.
Tarang P. Amin: And then for Mexico, as well as Notorium here with Ulta Beauty, which we're very excited about our first time with Notorium and that customer. Certainly, for future space gains, we'll announce those in subsequent quarters. So the 20 to 22 percent does not incorporate what we may expect in terms of future space gains. And again, we stand in a really strong spot just given the overall strength of our productivity model.
Shrank: Certainly for a future space gains, we'll announce those in subsequent quarters. So the 20% to 22% does not incorporate what we may expect in terms of future space gains and again, we stand in a really strong spot just given the overall strength of our productivity model.
Ray: And we love as Ray mentioned level, we're staying on the Korean and are very excited about the white space opportunity that we continue to have there and so.
Ray: As we have been we've been very choice phone very disciplined on the M&A front.
Ray: And feel great about the growth opportunities, we have across our brands and that we have in the portfolio.
Shrank: Yeah.
Speaker Change: Got it and I don't know if you want to talk anything about the magnitude of space gains that are getting at Ulta wasn't Vittorio more into four in Mexico, but if you can give any color on that and then just in terms of follow up it sounds like Vittorio has gone great and I just wanted to get a view on your thoughts on your view your view excuse me on.
Mandy Fields: I've said it before but our primary focus as Mandy said is on our existing brands and all the white space. We have we also have a very strong balance sheet and I think even after <unk>, our net debt to EBITDA is less than one times. So if we saw another notorious we would grab it but where she says we are quite disciplined and we can be paid.
Unknown Executive: Got it. And I don't know if you want to talk any bit about, you know, the magnitude of space games that you're getting at Ulta with Notorium or in Sephora in Mexico, but if you can give any color on that, and then just in terms of follow-up, sounds like Notorium is going great. And I just wanted to get a view on your long-term view, your view, excuse me, on the long-term opportunity for potentially other retailers, international, and how the success of Notorium influences how you think about M&A overall going forward.
Speaker Change: A long term opportunity for potentially other retailers international.
Ray: <unk>.
Ray: Yeah.
Speaker Change: Thanks, so much.
Speaker Change: How this excess inventory and move forward with how you think about M&A overall going forward. Thank you.
Speaker Change: The next question comes from Linda Bolton Weiser with D. A Davidson. Please go ahead.
Speaker Change: Yes.
Speaker Change: So I'd say the magnitude of the space gains we feel really good about we havent been disclosing exactly the space gains look like so we're going to have to wait till you see Walmart and sephora in some of these other customers, but we've made continual improvements in our presentation visual merchandising in stores and we feel really good about what those sets look like and then.
Speaker Change: Yes Hello.
Speaker Change: I was wondering if you could comment.
Speaker Change: Your margin expansion algorithm I know longer term you had been talking about.
Speaker Change: Once annually from mix enhancement.
Unknown Executive: So I'd say the magnitude of space games is something we feel really good about. We haven't been disclosing exactly what the space games look like, so you're going to have to wait till you see Walmart and Sephora and some of these other customers.
Speaker Change: And I was curious if that is.
Speaker Change: In terms of Victorian specifically, we feel great with the progress, we're making with Victoria. The team is doing an incredible job not only in terms of mapping out distribution gains, but also in the overall consumer engagement model and a terrific pipeline of innovation. So we're quite bullish on the Torrey I mean, its future certainly when you look at the distribution foot.
Speaker Change: Oh are you expecting to see that.
Speaker Change: Got it.
Speaker Change: In the next fiscal year.
Speaker Change: Comment on that and then related on the cost side. The Red Sea situation. You know you don't ship on time from.
From China.
Speaker Change: Europe, So I'm, assuming the Red sea situation is escalating.
Speaker Change: Print standpoint, I would say we continue to be.
Speaker Change: Our cost of shipping to the U S is that correct or am I understanding that correctly. Thank you.
Speaker Change: Perform extremely well at target.
Speaker Change: The terms main customer and player taking from the Elf playbook as we expand it to other customers. We continue to strengthen our business at target. We plan to do the exact same thing here, saying, we have strengths in Amazon.
Linda: Yes, Hi, Linda Great to hear from you. So let me first start with gross margin and the mix impact.
Linda: Over the past many years of <unk> history, we have benefited from mix.
Speaker Change: Alta is particularly excited about the launch for editorial and then if I look internationally, that's really wide open outside of shoppers drug Mart and space N K, where we can leverage a lot of what with the momentum we're seeing internationally on detour them as well.
Linda: Mixing our margin higher overtime.
Speaker Change: 10 basis points of gross margin expansion that we talked about this.
Speaker Change: For this guidance.
Speaker Change: Continues to have that in the background.
Speaker Change: Ed.
Speaker Change: But is there opportunity for that to do better overtime, but we again don't want to get too far ahead of ourselves. So we certainly hope to see next play a bigger role in fiscal 'twenty five, but again are taking it a little bit lower here.
Speaker Change: Then from an M&A standpoint Olivia.
Olivia Tong Cheang: We're really focused on the brands that we have in our portfolio today.
Terry: And we love as Terry mentioned Love, what we're seeing on the <unk> and are very excited about the white space opportunity that we continue to have there and so.
Speaker Change: Especially because as we cycle the benefit that we had in the base that we had transportation cost benefits and FX benefits in the base last year.
Terry: We have been we've been very choice phone very disciplined on the M&A front.
Terry: And feel great about the growth opportunities, we have across our brands and.
Tarang P. Amin: But we've made continual improvements in our presentation, and visual merchandising in stores, and we feel really good about what those sets look like. And then, in terms of Notorium specifically, we feel great about the progress we're making with Notorium. The team's doing an incredible job, not only in terms of mapping out distribution gains but also in the overall consumer engagement model and a terrific pipeline of innovation. So we're quite bullish on Notorium and its future.
Speaker Change: With the Red Sea disruption that we saw you're right, we're not shipping a turn to Europe, but overall, we felt costs rise and.
Terry: We have in our portfolio.
Terry: I've said it before but our primary focus as Mandy said is on our existing brands and all the white space. We have we also have a very strong balance sheet I think even after <unk>, our net debt to EBITDA is less than one times. So if we saw another notorious we would grab it but where she says we're quite disciplined and we can be patient.
Speaker Change: And because we have not we werent contracted on really any rate we were subject to market volatility. So we have to close some of those higher costs through well expect to see that in the first half of the year and we should see some recovery as we get into the second half of the year.
Tarang P. Amin: Certainly, when you look at a distribution footprint standpoint, I would say we continue to perform extremely well at Target, Notorium's main customer, and taking from the e.l.f. playbook, as we expand it to other customers, we continue to strengthen our business at Target. We plan to do the exact same thing here, saying we have strength in Amazon. Ulta is particularly excited about the launch for Notorium, and then if I look internationally, that's really wide open outside of Shoppers, Drug Mart, and Space NK, where we can leverage a lot of the momentum we're seeing internationally on Notorium as well.
Unknown Executive: And then from an M&A standpoint, Olivia, you know, we're really focused on the brands that we have in our portfolio today. And we love, as Tarang mentioned, love what we're seeing on Notorium and are very excited about the white space opportunity that we continue to have there. And so, as we have been, we've been very choiceful and very disciplined on the M&A front and feel great about the growth opportunities we have across our brands that we have in the portfolio. And, you know, I've said it before, but
Terry: <unk>.
Speaker Change: The next question comes from Susan Anderson with Canaccord Genuity. Please go ahead.
Speaker Change: Thanks, so much.
Speaker Change: The next question comes from Linda Bolton Weiser with D. A Davidson. Please go ahead.
Speaker Change: Hi, good evening, Thanks for taking my question.
Susan Anderson: I guess I wanted to ask about the nature and rollout and alter this summer I guess, how should we think about that shelf space is it going to be the full product offering that we see similar to target.
Speaker Change: Yes Hello.
Speaker Change: I was wondering if you could comment.
Speaker Change: Your margin expansion algorithm I know longer term you had been talking about.
Unknown Executive: Yeah, and I've said it before, but our primary focus, as Mandy said, is on our existing brands and all the white space we have. We also have a very strong balance sheet. I think even after Notorium, our net debt to EBITDA is less than one times. So if we saw another Notorium, we would grab it. But we are, as she says, quite disciplined, and we can be patient.
Susan Anderson: From skin care to body care and then also is it in all the doors and then I was just curious kind of how you think about marketing dollar allocation towards the nature and brand versus else I assume a good portion of that is going more towards the off brands. So I'm just curious how much you're spending there versus alf. Thanks.
Speaker Change: 100 basis points annually from Nick Jansen.
Speaker Change: Yes.
Speaker Change: And I was curious if that is.
Linda Ann Bolton: The next question comes from Linda Bolton Weiser with D.A. Davidson. Please go ahead.
Speaker Change: Oh are you expecting.
Speaker Change: Got it.
Speaker Change: In the next fiscal year.
Speaker Change: If you could comment on that and then related on the cost side, So Wednesday situation.
Speaker Change: Thank you.
Speaker Change: Sure.
Speaker Change: So the Ah Hi, Susan touring the Torreon rollout at Ulta, we feel extremely great about it we'll have the full assortment. So you will have both facial skin care as well as body care. Both segments are doing extremely well for notorious as it's good to have the entire lineup there and it will be in all stores. So we feel good about both.
Speaker Change: China to Europe, So I'm, assuming the Red sea situation is escalating.
Speaker Change: Our cost of shipping to the U S is that correct or am I understanding that correctly. Thank you.
Linda: Yes, Hi, Linda Great to hear from you. So let me first start with gross margin and the mix impact.
Speaker Change: Are those things and then in terms of the marketing right. We usually we approach marketing as a percent of sales and so we have rates assigned by each brand that then roll up to the overall guidance that we've given of 24% to 26%. So we haven't disclosed individual brand rates, but the natrium rates are not that far off from.
Linda: Over the past many years of <unk> history, we have benefited from mix.
Linda: Mixing our margin higher overtime.
Linda: 10 basis points of gross margin expansion that we talked about.
Unknown Executive: Yes, hello. I was wondering if you could comment on your margin expansion algorithm. I know longer term you had been talking about 100 basis points annually from mixed enhancement, and I was curious if that is still applicable. Are you expecting to see that embedded in the next fiscal year? If you could comment on that, would you please? And then, related on the cost side, the Red Sea situation. You don't ship a ton from China to Europe. So I'm assuming the Red Sea situation is escalating your costs of shipping to the US. Is that correct? Are we understanding that correctly? Thank you. Hi Linda.
Mandy J. Fields: Hi Linda, great to hear from you. So let me first start with gross margin and the MIX impact. You know, over the past many years of e.l.f.'s history, we have benefited from MIX, increasing our margin higher over time. The 10 basis points of gross margin expansion that we talked about, this guidance continues to have that in the background, and potential opportunities for that to be better over time. But we, again, don't want to get too far ahead of ourselves.
Linda: This for this guidance.
Linda: Continues to have that in the background.
Linda: <unk>.
Speaker Change: But is there opportunity for that to do better over time, but we don't want to get too far ahead of ourselves. So we certainly hope to see next play a bigger role in fiscal 'twenty five, but again are taking it a little bit slower here.
Speaker Change: The overall <unk> rates.
Speaker Change: And so that's a little bit of a way to think about that as a hub.
Speaker Change: As the business grows there will be more marketing absolute marketing dollars, but it set on a rate of <unk>.
Speaker Change: Especially because as we cycle the benefit that we had in the base that we had transportation cost benefits and FX benefits in the base last year.
Speaker Change: Percent of sales.
Speaker Change: Okay, great. Thanks, so much okay very helpful. Good luck the rest of the year.
Speaker Change: Thanks.
Mandy J. Fields: So we certainly hope to see MIX play a bigger role in fiscal 25, but again, we're taking it a little bit slower here, especially because as we cycle the benefits that we had in the base last year. With the Red Sea disruption that we saw, you're right, we're not shipping a ton to Europe, but overall, we saw costs rise. And because we have not, we weren't contracted at really any rates; we were subject to market volatility.
Speaker Change: The next question comes from Corinne.
Speaker Change: With the Red Sea disruption that we saw and you're right. We're not shipping a turn to Europe, but overall, we felt costs rise.
Speaker Change: Meyer with Piper Sandler. Please go ahead.
Corinne Meyer: Hey, good afternoon, thanks for taking the question and I'd like to.
Speaker Change: And because we have not we werent contracted on really any rate we were subject to market volatility. So we have to close some of those higher costs through well expect to see that in the first half of the year and we should see some recovery as we get into the second half of the year.
Got a little bit more color on how you're thinking about both the digital and international businesses.
Speaker Change: Fiscal year.
Mandy J. Fields: So we have to pass some of those higher costs through. We'll expect to see that in the first half of the year, and we should see some recovery as we get into the second half of the year.
Speaker Change: Both of these categories are both these segments have been growing high double to triple digits for you and it seems like you're gaining shelf space seems like digital is having good momentum, but the guidance implies a pretty significant slowdown. So can you just talk a little bit about how you're thinking about the trajectory for both digital and international this year.
Speaker Change: The next question comes from Susan Anderson with Canaccord Genuity. Please go ahead.
Speaker Change: Hi, good evening, Thanks for taking my question.
Susan Kay Anderson: I guess I wanted to ask about the nature am rollout and alter this summer I guess, how should we think about that shelf space is it going to be the full product offering that we see similar to target.
Speaker Change: Yeah, we feel great about our digital and international businesses in fact, our digital was up 90% for the full year in fiscal 'twenty for fiscal 'twenty four and <unk>.
Susan Kay Anderson: The next question comes from Susan Anderson with Canaccord Genuity. Please go ahead.
Susan Kay Anderson: From skin care to body care and then also is it in all the doors and then I was just curious kind of how you think about marketing dollar allocation towards the nature and brand versus else I assume a good portion of that is going more towards the off brands. So just curious how much you are spending there versus alf. Thanks.
Speaker Change: International was up 116% for the year, so both have incredible momentum behind them.
Unknown Executive: Hi, good evening. Thanks for taking my question. I guess I wanted to ask about the Naturium rollout in Ulta this summer. I guess, what should we think about that shelf space? Is it going to be the full product offering that we see at Target, from skincare to body care? And then also, is it in all the doors? And then I was just curious, kind of how you think about marketing dollar allocation towards the Naturium brand versus e.l.f.? I assume a good portion of that is going more towards e.l.f. brand, so I'm just curious how much you're spending there versus e.l.f.
Speaker Change: As we said our guidance implies kind of taken it a quarter at a time and we do believe that we should continue to see benefit from both of those as growth drivers for us on the road ahead, so really.
Speaker Change: Cited about what's the company talked about all the space expansion that we have from an international standpoint, reaching the number one brand in <unk> and do glass.
Susan Kay Anderson: Okay.
Speaker Change: So the high season, two ranked third detour in rollout at Ulta, we feel extremely great about it we'll have the full assortment. So you will have both facial skin care as well as body care. Both segments are doing extremely well for Victoria as it's good to have the entire lineup there and it will be in all stores. So we feel good about both.
We rolled out and so a lot of momentum there on the international side.
Speaker Change: Got it. Thank you and then can you just touch a little bit on your hiring plans for this year I know you've been building out a team in Europe I believe that's about complete and that can you just expand a little bit on how we should think.
Tarang P. Amin: So the high season, Tarang, the Deuterium rollout at Ulta, we feel extremely great about it. It will have the full assortment. So you will have both facial skincare as well as body care. Both segments are doing extremely well for Deuterium, and it's good to have the entire lineup there. And it will be in all stores. So we feel good about both of those things.
Are those things and then in terms of the marketing right. We usually we approach marketing as a percent of sales and so we have rates assigned by each brand that then roll up to the overall guidance that we've given of 24% to 26%. So we haven't disclosed individual brand rates, but the <unk> rates are not that far off from.
Speaker Change: Do you think about head count cost for SG&A this year. Thanks.
Korean: Yes Korean if you look at our history 10 years ago. When I started as CEO. We had about 100 employees. We have close to about 500, now and it's been pretty consistent in terms of how we built the team each year, we invest in our team and our infrastructure. This year is no different youll continue to see us continue.
Speaker Change: The overall <unk> rates.
Speaker Change: And so that's the way a little bit of way to think about that is.
Unknown Executive: And then in terms of the marketing rate, we usually approach marketing as a percent of sales. And so we have rates assigned to each brand that then roll up to the overall guidance that we've given of 24 to 26 percent. So we haven't disclosed individual brand rates, but the Deuterium rates are not that far off from the overall e.l.f. rates. And so that's a little bit of a way to think about that is, as the business grows, there will be more marketing, absolute marketing dollars, but it's set on a rate of percent of sales.
Speaker Change: As the business grows there will be more marketing absolute marketing dollars, but it set on a rate of <unk>.
Korean: To hire in the areas of need even in international while we built out the team. There. There is still further opportunity internationally, we've continued to make investments in our digital business.
Percent of sales.
Speaker Change: Okay, great. Thanks, so much okay very helpful. Good luck the rest of the year.
Speaker Change: Thanks.
Korean: Our integrated marketing really across the board to make sure that we have the right team that can continue to scale. The brand one of the other things that we've done in our approaches if you take a look at our any metric sales or profit per employee market cap per employee where.
Speaker Change: The next question comes from Corinne.
Speaker Change: Meyer with Piper Sandler. Please go ahead.
Hey, good afternoon, thanks for taking the question and I'd like to.
Korinne N. Wolfmeyer: It got a little bit more color on how youre thinking about both the digital and international businesses.
Unknown Executive: Okay, great. Thanks so much. That was very helpful. Good luck the rest of the year.
Korean: There are many factors ahead of many of our legacy players and it's just our approach of making sure. We have a strong team, but we don't get ahead of ourselves from a team standpoint, such that everyone has really full jobs plenty of opportunities and our ability to collaborate well in our high performance team culture, and really be able to drive both the.
Korinne N. Wolfmeyer: The next question comes from Corinne Wolfmeyer with Piper Sandler. Please go ahead.
Speaker Change: Fiscal year <unk>.
Both of these categories are both these segments have been growing high double to triple digits for you and it seems like you're gaining shelf space seems like digital is having good momentum, but the guidance implies a pretty significant slowdown. So can you just talk a little bit about how you're thinking about the trajectory for both digital and international this year.
Unknown Executive: Hey, good afternoon, team. Thanks for taking the question. I'd like to... Get a little bit more color on how you're thinking about both the digital and international businesses this fiscal year. I mean, both of these categories, or both these segments have been growing high double to triple digits for you. And it seems like you're gaining shelf space, and digital is having good momentum. But the guidance implies a pretty significant slowdown. So can you just talk a little bit about how you're thinking about the trajectory for both digital and international this year?
Speed and the quality of execution, you've seen so there's no change there you will have additional hires I don't think we've rolled out what those hires are.
Speaker Change: Yeah, we feel great about our digital and international businesses. In fact digital was up 90% for the full year in fiscal 'twenty for fiscal 'twenty four and <unk>.
Korean: Other than we've all along the way investing in the team and that has paid huge dividends in terms of the results you see.
Speaker Change: International was up 116% for the year, so both have incredible momentum behind them.
Speaker Change: Great. Thanks, so much best of luck this year.
Unknown Executive: We feel great about our digital and international businesses. In fact, digital was up 90% for the full year in fiscal 24, and international was up 116% for the year. So both have incredible momentum behind them. As we said, our guidance implies kind of taking it a quarter at a time, and we do believe that we should continue to see benefit from both of those as growth drivers for us on the road ahead.
Korean: Thanks.
Speaker Change: As we said our guidance implies kind of taken it a quarter at a time and we do believe that we should continue to see benefit from both of those as growth drivers for us on the road ahead, so really.
Speaker Change: Next question comes from Peter Grom with UBS. Please go ahead.
Speaker Change #100: Thank you operator, and good afternoon, everyone I hope youre doing well.
Peter Grom: Two quick ones from me, maybe you've kind of mentioned sales in <unk> <unk> above the full year range and I apologize if I missed this but is there any way you can provide some guardrails on what that might look like totally.
Speaker Change: Really excited about what's to come and talk about all the space expansion that we have from an international standpoint, reaching the number one brand in autos and do glass.
Speaker Change: We rolled out and so a lot of momentum there on the international side.
Speaker Change #102: Charity and benefits, but I think it would be helpful to get some color on how much above or you would expect to be and then the second question is just on the EBITDA guidance I'm just trying to understand.
Speaker Change: Got it. Thank you and then can you just touch a little bit on your hiring plans for this year I know you've been building out a team in Europe I believe that's about complete but can you just expand a little bit on how we should think.
Unknown Executive: So really excited about what's to come. We talked about all the space expansion that we have from an international standpoint, reaching the number one brand in Etos and Douglas as we rolled out. And so there is a lot of momentum on the international side.
Speaker Change #102: While we may not see better leverage this year totally understand the GM commentary and I think marketing and digital.
Speaker Change: [noise] about head count cost for SG&A this year. Thanks.
Speaker Change #102: Flat year over year as a percentage of sales at least based on the guidance at the midpoint. So those two alone would kind of get you to your margin guidance, but historically, you've seen some really nice leverage on the non marketing SG&A and the guidance doesn't necessarily embed a lot of that this year. So just.
Unknown Executive: Got it. Thank you. And then can you just touch a little bit on your hiring plans for this year? I know you've been building out a team in Europe. I believe that's about complete. But can you just expand a little bit on, you know, how we should be thinking about headcount costs for SG&A this year?
Speaker Change: Yes, Corey if you look at our history 10 years ago. When I started as CEO. We had about 100 employees. We have close to about 500, now and it's been pretty consistent in terms of how we built the team each year, we invest in our team and our infrastructure.
Speaker Change #103: Am I thinking about that right and if so can you provide any color as to what may be driving that thanks.
Speaker Change: This year is no different youll continue to see us continue to hire in the areas of need even in international while we built out the team. There. There is still further opportunity internationally. We've continued to make investments in our digital business and our integrated marketing really across the board to make sure that we have the right team that can continue to scale the brand one of the other <unk>.
Tarang P. Amin: Yeah, Korinne, if you look at our history, 10 years ago, when I started as CEO, we had about 100 employees; we have close to about 500 now. And it's been pretty consistent in terms of how we built the team. Each year, we invest in our team and our infrastructure. This year is no different; you'll continue to see us continue to hire in the areas of need, even in international markets. While we've built out the team there, there's still further opportunity internationally. We've continued to make investments in our digital business, in our integrated marketing, really across the board, to make sure that we have the right team that can continue to scale the brand.
Speaker Change #104: Sure. So let me start with your first question, Peter and good to hear from you by the way.
Speaker Change #105: Sales in Q1, and how we're thinking about that I guess from a building block standpoint.
Speaker Change #105: Given some bread crumbs on Nielsen and what can you kind of expect there in terms of that being in the 20% range as we go through the summer.
Speaker Change: Things that we've done in our approaches if you take a look at our any metric sales or profit per employee market cap per employee where many factors ahead of many of our legacy players and it's just our approach of making sure. We have a strong team, but we don't get ahead of ourselves from a team standpoint, such that everyone has really full.
Speaker Change #105: We also as you mentioned that <unk> would be an additional impact and then you would have to assume some.
Speaker Change #105: Further impact from the international and digital as well to get to that number now we don't provide quarterly guidance. So I can't give you a number specifically, but that gives you a little bit of flavor as to what to expect for Q1 sales in terms of EBITDA guidance I feel great about our EBITDA guidance you know, we're guiding 23% on the top end.
Tarang P. Amin: One of the other things that we've done in our approach is if you take a look at any metric, sales or profit per employee, market cap per employee, we're many factors ahead of many of our legacy players. And it's just our approach to making sure we have a strong team, but that we don't get ahead of ourselves from a team standpoint, such that everyone has really full jobs, plenty of opportunities, and our ability to collaborate well in our high-performance team culture and really be able to drive both the speed and the quality of execution you've seen.
Jobs plenty of opportunities and our ability to collaborate well in our high performance team culture, and really be able to drive both the speed and the quality of execution you've seen so there's no change there you'll have additional hires I don't think we've rolled out what those hires are.
On top of 101% growth in adjusted EBITDA last year, and it's really incredible performance and what we've said for many years now is that we expect adjusted EBIT to outpace our net sales growth and have that leverage year. After year, the degree to which that leverage come through will vary from year to year and so for the past.
Speaker Change: Other than we've all along the way invested in the team and that has paid huge dividends in terms of the results you see.
Tarang P. Amin: So there's no change there, you will have additional hires. I don't think we've rolled out what those hires are. Other than, you know, we've all along the way invested in the team, and that's paid huge dividends in terms of the results you're getting.
Speaker Change: Great. Thanks, so much best of luck this year.
Speaker Change #105: A couple of years, we have really had incredible leverage and our adjusted EBITDA certainly believe there is opportunity for us to see further leverage on the non marketing side as we go through.
Speaker Change: Thanks.
Speaker Change: The next question comes from Peter Grom with UBS. Please go ahead.
Speaker Change: Thank you operator, and good afternoon, everyone I hope you're doing well too.
Speaker Change #105: But again don't want to get too far ahead of ourselves when it make sure that we're being balanced in the approach that we're taking and again, taking it one quarter at a time.
Speaker Change: Two quick ones from me Mandy you've kind of mentioned sales in <unk>.
Unknown Executive: Great, thanks so much. Best of luck this year.
Speaker Change: The full year range and I apologize if I missed this but is there any way you can provide some guardrails on what that might look like totally get near the nature and benefits I think it would be helpful to get some color on how much above you would expect to be and then the second question is just on the EBITDA guidance I'm just trying to understand.
Peter K. Grom: The next question comes from Peter Grom with UBS. Please go ahead.
Speaker Change #106: Thanks, So much I'll pass it on.
Peter Grom: Thanks Peter.
Speaker Change #107: Our next question comes from Anna <unk> with Bank of America. Please go ahead.
Unknown Executive: Thank you, operator. Good afternoon, everyone. I hope you're doing well.
Unknown Executive: Two quick ones from me. Mandy, you kind of mentioned sales in one queue above the full year range, and I apologize if I missed this, but is there any way you can provide some guardrails on what that might look like? I totally get the maturity and benefits, but just I think it'd be helpful to get some color on, you know, how much above you would expect to be. And then the second question is just on the EBITDA guidance.
Speaker Change #108: Hi, good afternoon, and thanks, so much for the question just wanted to follow up on the shelf space expansions I guess as we think about the landscape of where beauty is outperforming you are more exposed to target then to Walmart, but at least this quarter. There was greater outperformance in overall beauty at Walmart versus target according to those retailers.
Speaker Change: While we may not see better leverage this year totally understand the GM commentary and I think marketing and digital is kind of flat year over year as a percentage of sales at least based on the guidance at the midpoint. So those two alone would kind of get you to your margin guidance, but historically you've seen some really nice leverage on the non marketing SG&A in the guidance.
Speaker Change #109: So how do you think about the opportunity for shelf space gains continuing in the long term versus the shelf space that peers have at those retailers and that is when you think about the launch of ALS at Sephora in Mexico do you have any specific plans on which brands or products they might be bringing to this market. Thank you.
Unknown Executive: I'm just trying to understand why we may not see better, you know, leverage this year. I totally understand the GM commentary, and I think marketing and digital are kind of flat year-over-year as a percentage of sales, at least based on the guidance at the midpoint. So those two alone would kind of get you to your margin guidance. But historically, you've seen some really nice leverage on the non-marketing SG&A, and the guidance doesn't necessarily embed a lot of that this year. So just am I thinking about that right? And if so, can you provide any color as to what may be driving that?
Speaker Change: Doesn't necessarily mean that a lot of that this year. So just.
Speaker Change: Am I thinking about that right and if so can you provide any color as to what may be driving that thanks.
Speaker Change #100: Sure. So let me start with your first question, Peter and good to hear from you by the way.
Speaker Change #110: Hi, Ana so we feel great about the prospects of shelf space gains in the future. We are gaining share every single retailer. We are in our growth rates are well in excess of their categories and we're seeing as a key growth brand. So as you take a look as I mentioned a target even first quarter, we were 23% of the <unk>.
Speaker Change #100: Sales in Q1, and how we're thinking about that I guess from a building block standpoint.
Speaker Change #100: We've given some bread crumbs on Nielsen and what can you kind of expect there in terms of that being in the 20% range as we go through the summer.
Speaker Change #101: We also as you mentioned that <unk> would be an additional impact and then you would have to assume some.
Mandy J. Fields: Thanks. Let me start with your first question, Peter.
Mandy J. Fields: Let me start with your first question, Peter. And it's good to hear from you, by the way.
Speaker Change #110: Tire category sales, you will not find our space anywhere near that so that even a huge opportunity within target feel pleased about the shelf space that we're going to be gaining in Walmart I don't think we'd be done there either with the summer still have a massive opportunity. So I feel very confident about our ability to continue to get space.
Speaker Change #101: Further impact from the international and digital as well to get to a number now we don't provide quarterly guidance. So I can't give you a number specifically, but that gives you a little bit of flavor as to what to expect for Q1 sales in terms of EBITDA guidance I feel great about our EBITDA guidance you know, we're guiding 23% on the top end.
Speaker Change #110: So just like we've proven over the last 10 years, we've had a pretty good consistent cadence of being able to pick up space given the growth that we have and the innovation and the consumer profile we bring.
Speaker Change #101: On top of 101% growth in adjusted EBITDA last year, and it's really incredible performance and what we've said for many years now is that we expect adjusted EBITDA to outpace our net sales and have that leverage year after year, the degree to which that leverage come through will vary from year to year, and so but that path.
Unknown Executive: Sales in Q1 and how we're thinking about that, I guess, from a building block standpoint, we've given some breadcrumbs on Nielsen and what to kind of expect there in terms of that being in the 20% range as we go through the summer. We also, as you mentioned, Naturium would be an additional impact. And then you would have to assume some further impact from international and digital as well to get to a number.
Speaker Change #111: To market and then in Sephora, Mexico, we're starting with the <unk> brand in Sephora, Mexico there'll be a primary focus of color of skin in that market and then we'll look at the rest of our brand portfolio over time, but we're at least starting with those those two brands.
Speaker Change #101: Couple of years, we have really had incredible leverage and our adjusted EBITDA certainly believe there's opportunity for us to see further leverage on the non marketing side as we go through.
Speaker Change #112: Great. Thanks, so much.
Next question comes from Oliver Chen with TD Cowen. Please go ahead.
Speaker Change #101: But again don't want to get too far ahead of ourselves when it make sure that we're being balanced in the approach that we're taking.
Unknown Executive: Now, we don't provide quarterly guidance. So I can't give you a number specifically, but that gives you a little bit of flavor as to what to expect for Q1 sales. In terms of EBITDA guidance, I feel great about our EBITDA guidance. You know, we're guiding 23% on the top end, on top of 101% growth in adjusted EBITDA last year. It's really incredible performance.
Mandy J. Fields: And what we've said for many years now is that we expect adjusted EBITDA to outpace our net sales growth and have that leverage year after year. The degree to which that leverage comes through will vary from year to year. And so for the past couple of years, we have really had incredible leverage in our adjusted EBITDA, and certainly believe there's opportunity for us to see further leverage on the non-marketing side as we go. But again, we don't want to get too far ahead of ourselves, and want to make sure that we're being balanced in the approach that we're taking. And again, taking it one quarter at a time.
Speaker Change #113: Alright, hearing and Mandy regarding international in skin care, which we know about the margin profile. There as you continue to scale and make lots of great progress. There also as we think about take talk and the geopolitical environment, you've been very agile thinking about marketing spend but what are your thoughts in terms of changes that may happen there.
Speaker Change #101: And again, taking it one quarter at a time.
Speaker Change #102: Thanks, So much I'll pass it on.
Peter K. Grom: Thanks Peter.
Speaker Change #104: The next question comes from Anna <unk> with Bank of America. Please go ahead.
Anna: Hi, good afternoon, and thanks, so much for the question just wanted to follow up on the shelf space expansions I guess as we think about the landscape of where beauty is outperforming you are more exposed to target then to Walmart, but at least this quarter. There was greater outperformance in overall beauty at Walmart versus target according to those retailers.
Speaker Change #113: And then more broadly on pricing how should we think about what youre doing in terms of like for like relative to innovation.
Anna Jeanne Lizzul: Anna Lizzul, Bank of America
Speaker Change #114: Oh, you are sick to keeping really clear awesome value.
Tarang P. Amin: Hi, good afternoon, and thanks so much for the question. I just wanted to follow up on the shelf space expansions. I guess as we think about the landscape of where beauty is outperforming, you are more exposed to Target than to Walmart, but at least this quarter, there was greater outperformance in overall beauty at Walmart versus Target, according to those retailers. So how do you think about the opportunity for shelf space gains continuing in the long term versus the shelf space that peers have at those retailers? And then, as we think about the launch of e.l.f. at Sephora in Mexico, do you have any specific plans on which brands or products you might be bringing to this market? Thank you.
Speaker Change #115: Generally speaking and give that back to the customer thanks a lot.
Speaker Change #106: So how do you think about the opportunity for shelf space gains continuing in the long term versus the shelf space that peers have at those retailers and then as we think about the launch of Alpha Sephora in Mexico do you have any specific plans on which brands or products that might be bringing to this market. Thank you.
Speaker Change #114: Okay.
Speaker Change #116: Thanks, Oliver I'll take the first question so from an international perspective.
Speaker Change #117: And overtime, we believe international as it scales can have a greater margin progress and just remember that the tariffs that we experienced here in the U S. We do not have in the international markets. So because of that we do believe that that could be a margin expansion opportunity as we continue to expand internationally.
Ana: Hi, Ana so we feel great about the prospects of shelf space gains in the future. We are gaining share every single retailer. We are in our growth rates are well in excess of their categories and we're seeing as a key growth brand. So as you take a look as I mentioned a target even first quarter, we were 23% of their.
Speaker Change #117: Whether that'd be in skincare or color cosmetics, because as we've talked in the past really no difference in margin profile between those categories for us.
Tarang P. Amin: Hi Anna. So we feel great about the prospects of shelf space gains in the future. We are gaining share in every single retailer we're in. Our growth rates are well in excess of their categories, and we're seen as a key growth brand. So as we take a look, as I mentioned at Target even, in the first quarter, we were 23% of their entire category sales. You will not find our space anywhere near that. So even though a huge opportunity within Target, we feel pleased about the shelf space that we're going to be gaining in Walmart. I don't think we'd be done there either this summer.
Ana: Entire category sales, you will not find our space anywhere near that so that even a huge opportunity within target feel pleased about the shelf space that we're going to be gaining in Walmart I don't think it will be done there either with the summer she'll have a massive opportunity.
Speaker Change #117: And then on your second question regarding Tic Toc Youre right were highly agile. We go we live where our community lives. So if anything happened to tick tock with such strength across social platforms, if I think about our.
Speaker Change #117: One channel on Twitch, our strengths on Instagram.
Ana: I feel very confident about our ability to continue to get space into a long term just like we've proven over the last 10 years, we've got a pretty good consistent cadence of being able to pick up space given the growth that we have and the innovation and the consumer profile we bring.
Speaker Change #118: Graham Reals Youtube.
Speaker Change #118: Roadblocks you name it we will highly confident that the consumers not going anywhere and we'll be there in a way that's native to that consumer to continue to engage them.
Tarang P. Amin: We still have a massive opportunity, so I feel very confident about our ability to continue to get space in the long term, just like we've proven over the last 10 years. We've had a pretty good consistent cadence of being able to pick up space given the growth that we have and the innovation and the consumer profile we bring to market.
And then from a pricing standpoint, and our philosophy on pricing as our margin progression has primarily been driven by innovation mix. We feel good about that strategy, bringing these holy Grail is to market that allow us higher margin profile mixing up the business that way a number of our competitors over the last few months did take pricing, we chose not to take pricing of both insurer.
Ana: To market and then in Sephora, Mexico, we're starting with the <unk> brand in Sephora, Mexico there'll be a primary focus of color of skin in that market and then we will look at the rest of our brand portfolio over time, but we're at least starting with us those cigarettes.
Ana: Yeah.
Great. Thanks, so much.
Speaker Change #108: Next question comes from Oliver Chen with TD Cowen. Please go ahead.
Speaker Change #118: Phenomenal value proposition, but more importantly, we like holding pricing in our back pocket theres been talk potentially of incremental tariffs as we approach that challenged that's not an FY 'twenty five issue that's more for FY 'twenty six we will use the same balanced approach. We did in 2019, when we're faced with tariffs for <unk>.
Unknown Executive: And then, in Sephora Mexico, we're starting with the e.l.f. brand. In Sephora Mexico, that'll be our primary focus, e.l.f. color, and e.l.f. skin in that market. And then we'll look at the rest of our brand portfolio over time, but we're at least starting with those two brands.
Speaker Change #109: Alright, hearing and Mandy regarding international and skincare, which we know about the margin profile. There as you continue to scale and make lots of great progress. There also as we think about <unk> talked in the geopolitical environment, you've been very agile thinking about marketing spend but.
Oliver Chen: Great, thanks so much.
Tarang P. Amin: The next question comes from Oliver Chen with TD Cowen. Please go ahead.
Speaker Change #118: <unk> thousand 22, when we had inflationary pressures, we want to keep pricing in our back pocket along with some of the other mechanisms we use to be able to help mitigate any external.
Mandy J. Fields: Hi Tarang and Mandy, Regarding international and skin care, what should we know about the margin profile there as you continue to scale and make lots of great progress there? Also, as we think about TikTok in the geopolitical environment, you've been very agile in thinking about marketing spend, but what are your thoughts in terms of changes that may happen there? And then, more broadly, on pricing, how should we think about what you're doing in terms of like for like relative to innovation? I know you stick to keeping really clear, awesome value, generally speaking, and giving that back to the customer. Thanks a lot.
Speaker Change #110: What are your thoughts in terms of changes that may happen there.
Speaker Change #110: And then more broadly on pricing how should we think about what youre doing in terms of like for like relative to innovation.
Speaker Change #118: Threat to the business.
Speaker Change #119: Okay. Thank you.
Speaker Change #111: Do you stick to keeping really clear awesome value.
Speaker Change #120: Your your inventory your a very agile company. So as you think about upside potential how do you feel about the inventory position in being able to test read and react to react to potential upside.
Speaker Change #112: Generally speaking and give that back to the customer thanks a lot.
Speaker Change #111: Okay.
Speaker Change #111: Thanks, Oliver I'll take the first question so from an international perspective.
Speaker Change #121: Holy Grill touring has always been a hallmark strategy. What do you think the next families are in terms of more emerging Holy Grail opportunities as you look forward.
Speaker Change #111: And overtime, we believe international.
Speaker Change #113: As it scales can have greater margin progress and just remember that the tariffs that we experienced here in the U S. We do not have in the international.
Speaker Change #122: So I feel great about our inventory.
Mandy J. Fields: Thanks, Oliver. I'll take the first question. So from an international perspective, Over time, we believe international, as it scales, can have greater margin progress, and just remember that the tariffs that we experience here in the U.S. we do not have in the international markets, so because of that, we do believe that that could be a margin expansion opportunity as we continue to expand internationally, whether that be in skin care or color cosmetics, because as we've talked in the past, really no difference in margin profile between those categories for us.
Speaker Change #113: No market so because of that we do believe that that could be a margin expansion opportunity as we continue to expand internationally, whether that be in skin care or color cosmetics, because as we've talked in the past really no difference in margin profile between those categories right.
Speaker Change #122: Right.
Speaker Change #123: Sorry Oliver.
Oliver: Alright, I will go ahead and answer the question on inventory, we feel great about our inventory position as.
Speaker Change #123: As we talked.
Speaker Change #123: We had been increasing that inventory position to support the demand that we're seeing and certainly have room to support even further demand and upside potential should that come to fruition.
Speaker Change #113: And then on your second question regarding Tictoc Youre right were highly agile. We go we live where our community lives. So if anything happened to take Todd we saw strength across social platforms, if I think about our.
Speaker Change #123: And our inventory so we're feeling great about that.
Speaker Change #123: And on the Holy Grail strategies, we feel great. We have a rich pipeline that goes out three years and then the agility to move things up as our community demands at a Great example is <unk>.
Speaker Change #113: One channel on Twitch or strength on Instagram Instagram Reals Youtube.
Tarang P. Amin: And then on your second question regarding TikTok, you're right, we're highly agile. We go, and we live where our community lives.
Speaker Change #113: Roadblocks you name it we will highly confident that the consumers not going anywhere and we'll be there in a way that's native that consumer to continue to engage them.
Tarang P. Amin: So if anything happens to TikTok, we have such strength across social platforms. If I think about our own channel on Twitch, our strength on Instagram, Instagram Reels, YouTube, Roblox, you name it, we will be highly confident that the consumer is not going anywhere, and we'll be there in a way that's native to that consumer to continue to engage them. And then from a pricing standpoint, our philosophy on pricing is that our margin progression has primarily been driven by innovation mix.
Launch we're about to have here.
Speaker Change #123: Our branching drops it's the most requested item from our community and our ability to pull that up in our own innovation pipeline and bring that to market. Soon extremely excited about that so I think youll just have to stay posted but we have a rich slate of continued innovation and feel really good about the strength of that innovation across both.
Speaker Change #113: And then from a pricing standpoint, you know our philosophy on pricing as our margin progression has primarily been driven by innovation mix. We feel good about that strategy, bringing these holy Grail is to market that allow us higher margin profile mixing up the business that way a number of our competitors over the last few months did take pricing, we chose not to take pricing of both insurer.
Speaker Change #125: Cosmetics as well as skincare.
Speaker Change #125: Okay.
Speaker Change #126: This concludes our question and answer session I would like to turn the conference back over to to ring.
Speaker Change #113: Phenomenal value proposition, but more importantly, we like holding pricing in our back pocket theres been talk potentially of incremental tariffs as we approach that challenged that's not an FY 'twenty five issue that's more for FY 'twenty six we will use the same balanced approach. We did in 2019, when we're faced with tariff or <unk>.
Tarang P. Amin: We feel good about that strategy, bringing these holy grails to market that allow us a higher margin profile, mixing up the business that way. A number of our competitors over the last few months did take pricing. We chose not to take pricing, both ensuring a phenomenal value proposition, but more importantly, we like holding pricing in our back pocket. There's been talk, potentially, of incremental tariffs as we approach that challenge. That's not an FY25 issue; that's more for FY26.
<unk> for any closing remarks.
Speaker Change #127: Well, thank you for joining us today I am so proud of our incredible team, but ill beauty for delivering another industry leading year results. Thank you for every <unk> partner for your passion and dedication to our vision of creating a different kind of beauty company. We look forward to seeing some of you at our upcoming investor meetings and speaking with you in August when we'll discuss our <unk>.
Speaker Change #113: 22, when we had inflationary pressures, we want to keep pricing in our back pocket along with some of the other mechanisms we use to be able to help mitigate any external.
Speaker Change #127: Fourth first quarter results, thank you and be well.
Tarang P. Amin: We'll use the same balanced approach we did in 2019 when we were faced with tariffs or in 2022 when we had inflationary pressures. We want to keep pricing in our back pocket along with some of the other mechanisms we use to be able to help mitigate any external threat to the business.
Speaker Change #113: Threat to the business.
Speaker Change #114: Okay. Thank you.
Speaker Change #115: Your your inventory Youre very agile company. So as you think about upside potential how do you feel about the inventory position in being able to test read and react to react to potential upside.
Speaker Change #128: Conference has now concluded. Thank you for attending today's presentation you may now disconnect.
Speaker Change #116: Holy Grill touring has always been a hallmark strategy. What do you think the next families are in terms of more emerging Holy Grail opportunities as you look forward.
Unknown Executive: Okay, thank you. And your inventory. You're a very agile company. So as you think about upside potential, how do you feel about the inventory position and being able to test read and react to potential upside? And Holy Grail, Tarang has always been a hallmark strategy. What do you think the next families are in terms of more emerging Holy Grail opportunities as we look forward? So I feel great about our
Speaker Change #117: So I feel great about our inventory.
Speaker Change #117: Okay.
Speaker Change #118: Alright, Oliver vitamins.
Speaker Change #119: Alright, I'm going to go ahead and answer the question on inventory, we feel great about our inventory position.
Speaker Change #119: As we talk to them.
Unknown Executive: So I feel great about our industry. Sorry, Oliver.
Speaker Change #119: <unk> been increasing that inventory position to support the demand that we're seeing and certainly have room to support even further demand and upside potential should that come to fruition.
Unknown Executive: All right, I'm gonna go ahead and answer the question on inventory. We feel great about our inventory position. As we talked, you know, we have been increasing that inventory position to support the demand that we're seeing, and certainly have room to support even further demand and upside potential, should that come to fruition in our inventory. So we're feeling great about that.
Speaker Change #119: And our inventory so feeling great about that.
Speaker Change #119: And on the Holy Grail strategy, we feel great. We have a rich pipeline that goes out three years and then the agility to move things up as our community demands at a Great example is <unk>.
Speaker Change #119: Launch we're about to have here in our bronzing drops it's the most requested item from our community and our ability to pull that up in our own innovation pipeline and bring that to market. Soon are extremely excited about that so I think youll just have to stay posted but we have a rich slate of continued innovation and feel really good about this.
Unknown Executive: And on the Holy Grail strategy, we feel great. We have a rich pipeline that goes out three years, and then the agility to move things up as our community demands it. A great example is a launch we're about to have here in our bronzing drops. It's the most requested item from our community, and our ability to pull that out of our own innovation pipeline and bring that to market soon. I am extremely excited about that.
Speaker Change #119: Strength of that innovation across both color cosmetics as well as skincare.
Speaker Change #119: Yes.
Speaker Change #120: This concludes our question and answer session I would like to turn the conference back over to to ring.
I mean for any closing remarks.
Unknown Executive: So I think, you know, you'll just have to stay posted, but we have a rich slate of continued innovation and feel really good about the strength of that innovation across both color cosmetics as well as skin care.
Speaker Change #121: Well, thank you for joining us today I'm, so proud of our incredible team at health beauty for delivering another industry, leading year results. Thank you for every <unk> partner for your passion and dedication to our vision of creating a different kind of beauty company. We look forward to seeing some of you at our upcoming investor meetings and speaking with you in August when we'll discuss our fourth.
Tarang P. Amin: This concludes our question and answer session. I would like to turn the conference back over to Tarang. Amin, for any closing remarks. Well, thank you.
Tarang P. Amin: Well, thank you for joining us today. I'm so proud of our incredible team at e.l.f. Beauty for delivering another industry-leading year of results. Thank you for every e.l.f. and e.l.f. partner for your passion and dedication to our vision of creating a different kind of beauty company. We look forward to seeing some of you at our upcoming investor meetings and speaking with you in August when we'll discuss our first quarter results. Thank you, and be well.
Speaker Change #121: First quarter results, thank you and be well.
Speaker Change #122: Conference has now concluded. Thank you for attending today's presentation you may now disconnect.
Speaker Change #122: Okay.
Operator: The conference is now concluded. Thank you for attending today's presentation. You may now disconnect.
Speaker Change #122: Thanks.
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