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E.l.f. Beauty thrives with social, multichannel strategies

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OAKLAND, Calif. — E.l.f. Beauty Inc. cites its strong social media presence and multichannel approach as key factors behind its robust sales growth.

elf-beauty-productsThe cosmetics and beauty care company has reported an 11% year-over-year sales gain to $56.3 million for the third quarter and a 22% rise to $153.1 million for the nine months ended Sept. 30.

Just before the quarter’s end, the company completed an initial public offering of more than 9.58 million shares of common stock, which generated net proceeds of $63.2 million.

“We are pleased to report strong third-quarter results, reflecting double-digit growth in net sales, significant gross-margin expansion and progress toward our mission to make luxurious beauty accessible for all women to ‘play beautifully,’ ” e.l.f. chairman and chief executive officer Tarang Amin said in a statement. “This performance is especially gratifying, as we drove sales growth on top of the launch to 6,900 CVS stores in the third quarter of 2015.”

In a conference call with analysts on e.l.f.’s quarterly results, Amin noted that the company has successfully targeted the young, diverse and digitally savvy consumer base highly coveted by many beauty brands.

“Relative to the overall cosmetics category, we’re twice as developed among Millennials, overdeveloped among Hispanics and have strong appeal with makeup enthusiasts that consumers are driving in categories,” he said.

During the quarter, e.l.f. launched e.l.f. Beauty Scape, a social activation event that engaged 50 of the brand’s beauty influencers, spotlighted some of the company’s product innovations, and offered makeup education and tips. According to Amin, the program produced a 25% increase in Instagram followers and reached a community of 53 million across social media platforms.

Beauty Scape also previewed e.l.f.’s Beautifully Precise brush collection, with prices running from $5 to $12. Amin said the event generated significant social media and PR attention for the product, yielding more than 200 million impressions.

“Through authentic activations such as Beauty Scape, we believe we can further build awareness and deepen engagement with our consumers,” he said in the call.

E.l.f. also has launched its Beauty Squad loyalty program, and 80,000 consumers signed up in the first six weeks. “This program provides an important platform to personalize our communications and further engage with our makeup enthusiasts. Our vision is to build deeper relationships with our consumers by encouraging and rewarding them to continue engaging and shopping with e.l.f.,” Amin explained.

Along with its own retail outlets, e.l.f. cosmetics and beauty products are sold at such retail stores as Walmart, Target, CVS and Old Navy, as well as online at ElfCosmetics.com, Amazon.com, Ulta.com and other e-tailers. The beauty care company opened seven e.l.f. stores in the third quarter to give it 15 stores overall, including its first California stores with two locations in metropolitan Los Angeles.

“We are true multichannel brand, with strength in e-commerce, our own stores and national retailers. Going forward, the majority of the growth will be driven by national retailers,” Amin told analysts on the call. “Having said that, our direct channel plays an incredibly important role, both in terms of validating our innovation, engaging with our consumers and really, we believe, has a significant room to grow.”

And he added that e.l.f. embraces a channel-agnostic philosophy, reflecting its innovative product offering and brand positioning. “Given the cleanliness of our business model, we are ambivalent whether someone buys e.l.f. cosmetics in elfcosmetics.com or whether they buy at Walmart, Target or Amazon. It’s a brand where we have very good in pricing across channels, and one where we can grow,” he said. “It all comes back to our core consumer, the makeup enthusiast who seamlessly navigates between online and offline and who wants to find a brand in the place that she is looking to shop.”


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