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Q1 FY 2021 EARNINGS WEBCAST AUGUST 5, 2020
As a reminder, this call contains forward-looking statements that are based on management’s expectations – including those relating to the category
trends and longer-term outlook – and are subject to known and unknown risks and uncertainties, and therefore, actual results may differ materially.
Important factors that may cause actual results to differ are detailed in
today’s press release and the company’s SEC filings. In addition, the company’s presentation today includes information presented on a non-
GAAP basis. We refer you to today’s press release for a reconciliation of the differences between the non-GAAP presentation and the most directly
comparable GAAP measures. Please note after the presentation there is a separate dial-in for the QA session, also noted in the press release.
TARANG P. AMIN CHAIRMAN &
CHIEF EXECUTIVE OFFICER
STRATEGIC FRAMEWORK
3
NEW LIFESTYLE BEAUTY BRAND
2
Q1 FY 2021 RESULTS
1
TODAY’S AGENDA
+7%
+11%
+16%
Q1 FY 20 Q2 FY 20 Q3 FY 20 Q4 FY 20
+8%
Q4 FY 19
+3%
NET SALES GROWTH BY QUARTER, EXCLUDES E.L.F. STORES
Q1 FY 21
+8%
SIX CONSECUTIVE QUARTERS OF NET SALES GROWTH
$65 MILLION
+8%
Q1 FY 21 NET SALES
GROSS MARGIN ADJUSTED EBITDA
$16M67%
+500BPS
+7%
Q1 FY 21 RESULTS
COVERGIRL -190
MAYBELLINE -250
E.L.F. +100
L’OREAL -190
NIELSEN XAOC L12 WEEKS ENDING 6/13/20
Q1 FY 21 SHARE CHANGE (BPS) - TOP 5 COLOR COSMETICS BRANDS
REVLON -230
5.5%SHARE
E.L.F.
E.L.F.
COLOR
L4 Weeks
-11.7%
+13.0%
-21.5%
-3.8%
L12 Weeks
NIELSEN XAOC ENDING 6/13/20
L24 Weeks
-13.1%
+2.5%
OUTPERFORMING CATEGORY TRENDS
DRIVE BRAND
DEMAND
DOUBLE DOWN
DIGITAL
COST SAVINGS
FIRST TO MASS
LEADING PRODUC-TIVITY
EXECUTING ON OUR FIVE STRATEGIC IMPERATIVES
OUR MISSION: BEST OF BEAUTY
ACCESSIBLE TO EVERY EYE, LIP AND FACE
DIGITAL ENGAGEMENT
2
ABILITY TO MOVE AT
E.L.F. SPEED
3
VALUE EQUATION
1
WELL POSITIONED TO CONTINUE TO GAIN MARKET SHARE
Q1 FY 2021 HIGHLIGHTS
DRIVE BRAND DEMAND
FIRST TO MASS
HOLY GRAILS
100% VEGAN &
CRUELTY-FREE
PREMIUM QUALITY
UN- BELIEVABLE
PRICE
UNIVERSAL APPEAL
OUR SUPERPOWERS
GOVERNMENT STIMULUS IMPACT
-40%
-30%
-20%
-10%
0%
10%
20%
JAN 20 FEB 20 MAR 20 APR 20 MAY 20 JUN 20
-12%-14%
-38%
-11%
-2%0%
13%9%
-30%
0%
15%13%
COLOR COSMETICS YOY $ SALES GROWTH
NIELSEN XAOC ENDING 6/13/20
E.L.F. SALES
CATEGORY SALES
Q1 FY 21 YOY GOOGLE SEARCH DEMAND
E.L.F.
CATEGORY
-9.5%
+1.5%
SEARCH DEMAND OUTPACING THE CATEGORY
+333% PRESS MENTIONS
5.5M INSTAGRAM FOLLOWERS
#EYESLIPSFACE
MOST VIRAL CAMPAIGN IN TIKTOK US HISTORY
NEW
FOCUSED ON ENTIRE DIGITAL ECOSYSTEM
CHIPOTLE BRAND COLLABORATION
4 MINS.TO SELL OUT
100%NEW CONSUMERS
+3MTIKTOK VIEWS
+350MPRESS IMPRESSIONS
NUMERATOR | ELFCOSMETICS.COM, FROM 3/1/2020 TO 6/1/2020
56%PURCHASERS AT
RETAIL WERE NEW SHOPPERS
65%PURCHASERS AT
ELFCOSMETICS.COM WERE NEW SHOPPERS
ATTRACTING NEW CONSUMERS TO THE BRAND
1.5XMORE SPEND
THAN NON-E.L.F.
PURCHASERS
HIGHLY ENGAGED BEAUTY CONSUMERS
BOVITZ, INC. (2020, JUNE) MAKEUP CATEGORY ATTITUDES & USAGE STUDY COMMISSIONED BY E.L.F. COSMETICS; CONFIDENTIAL & PROPRIETARY
MAJOR STEP UP IN DIGITAL
DIGITAL COMMERCE PENETRATION
FY 20 Q1 FY 21
11% 17%
TRIPLE DIGIT
GROWTHQ1 FY 21 DIGITAL CONSUMPTION
GROWTH
+150%
MEMBERS2M
BEAUTY SQUAD LOYALTY MEMBERS TO DATE | Q1 FY 21 GROWTH IN NEW MEMBER ACQUISITIONS VERSUS PY
BEAUTY SQUAD LOYALTY PROGRAM
elfcosmetics.com/eu
elfcosmetics.com/de
COUNTRIES WHERE E.L.F. IS AVAILABLE
FIRST TO MASS PRODUCT
CBD COLLECTION
-7%
+19%+47%
+32%
>100% ELFCOSMETICS.COM
CATEGORY E.L.F.
-17%
L4W ENDING
4/18
L4W ENDING
5/16
L4W ENDING
6/13Q1 FY 21
NIELSEN XAOC, SKIN CARE
SKIN CARE CONSUMPTION TRENDS
STRENGTH IN CORE SEGMENTS
#1 IN PRIMERS 36.2% $ SHARE
+6.5 $ SHARE PTS
#1 IN BRUSHES 34.7% $ SHARE
+0.8 $ SHARE PTS
#1 #2 & #3 BROW PENCILS 11.0% UNIT SHARE
+2.0 UNIT SHARE PTS
NIELSEN XAOC L52 WEEKS ENDING 6/13/20
CAMO CONCEALER FRANCHISE 15.0% $ SHARE OF CONCEALERS
+13 $ SHARE POINTS
BEAUTY SUPERHEROES
PUTTY PRIMER FRANCHISE 15.8% $ SHARE OF PRIMERS
+15 $ SHARE POINTS
NIE
LSEN
XA
OC
L1
2 W
EEK
S EN
DIN
G 6
/13
/20
PORELESS PUTTY PRIMER
#1
LUMINOUS PUTTY PRIMER
#4
NIELSEN XAOC L12 WEEKS ENDING 6/13/20, RANK WITHIN PRIMER CATEGORY
MATTIFYING PUTTY PRIMER
#7
SOLD OUT IN LESS THAN 5 DAYS ON
ELFCOSMETICS.COM
LEADING PRODUCTIVITY
EXPANDING THIS FALL
EXPANDING THIS FALL
EXPANDING THIS FALL
ELFCOSMETICS.COM
6% 9% 25%
TRACKED CHANNELS
FY 20 Q1 FY 21
SKIN CARE PENETRATION
Q1 FY 21
COST SAVINGS
SUPPLY CHAIN FULLY OPERATIONAL
AFTER 5 WEEKS
COGS SAVINGS
SHARPEN PRICING
INVEST IN BRAND RECHARGE
W3LL PEOPLE
STRATEGIC EXTENSIONS
W3LL PEOPLE
EWG-VERIFIED PRODUCTS
40
NEW LIFESTYLE BEAUTY BRAND
“What makes us different is also what makes us wildly,
boldly, and marvelously who we were born to be.”
COMING 2021
MULTI-YEAR MULTI-CATEGORY
PRODUCT PIPELINE
Board-certified Dermatologist
Associate Professor, University of Texas School of Medicine
Practice in medical dermatology & skin rejuvenation
W3LL PEOPLE Co-Founder
E.L.F. BEAUTY family member
DR. RENEE SNYDER
STRATEGIC FRAMEWORK
THE BOLD DISRUPTOR WITH A KIND HEART.
INCLUSIVE, ACCESSIBLE, CRUELTY-FREE BEAUTY.
LIFESTYLE BEAUTY BRAND
CRAFTED WITH ALICIA KEYS
FOR HOLISTIC WELLNESS
PLANT POWERED MASSTIGE BEAUTY
FOR THE CLEAN BEAUTY ENTHUSIAST
TREND DRIVEN MASS BEAUTY
FOR EVERY EYE, LIP AND FACE
LIFESTYLE BEAUTY BRAND
EXC
LUS
IVE D
ISTR
IBU
TION
AC
CES
SIB
LE D
ISTR
IBU
TIO
NPRESTIGE PRICE
MASS PRICE
LIFESTYLE BEAUTY BRAND
MOVING AT E.L.F. SPEED
DIGITAL STRENGTH
CORE VALUE PROPOSITION
OUTPACE THE CATEGORY
+ =
MANDY FIELDS SENIOR VICE PRESIDENT & CHIEF FINANCIAL OFFICER
STRATEGIC EXTENSIONS
3
PERSPECTIVE ON CURRENT
ENVIRONMENT
2
Q1 FINANCIAL RESULTS
1
TODAY’S AGENDA
$65 MILLION
+8%
Q1 FY 21 NET SALES
GOVERNMENT STIMULUS IMPACT
-40%
-30%
-20%
-10%
0%
10%
20%
JAN 20 FEB 20 MAR 20 APR 20 MAY 20 JUN 20
-12%-14%
-38%
-11%
-2%0%
13%9%
-30%
0%
15%13%
COLOR COSMETICS YOY $ SALES GROWTH
NIELSEN XAOC ENDING 6/13/20
E.L.F. SALES
CATEGORY SALES
COVERGIRL -190
MAYBELLINE -250
E.L.F. +100
L’OREAL -190
NIELSEN XAOC L12 WEEKS ENDING 6/13/20
Q1 FY 21 SHARE CHANGE (BPS) - TOP 5 COLOR COSMETICS BRANDS
REVLON -230
5.5%SHARE
E.L.F.
Q1 FY 21 GROSS MARGIN ELFCOSMETICS.COM
67%
+500BPS
LESS PROMOTIONAL
STRONGER GROSS MARGIN
MARGIN ACCRETIVE
MIXE-COMMERCE
FX RETAIL PRICE INCREASES
GROSS MARGIN DRIVERS
Q1 FY 20
47%
51%
ADJUSTED SG&A
Q1 FY 21
MARKETING & DIGITAL INVESTMENT
TARGET RANGE
12-14%11%Q1 FY 21
$16 MILLION
+7%
Q1 FY 21 ADJUSTED EBITDA
Q1 FY 20
$7M
Q1 FY 21
$9M
ADJUSTED NET INCOME
$0.17
Q1 FY 21Q1 FY 20
$0.14
ADJUSTED EPS
CASH ON HAND + REVOLVING CREDIT FACILITY
>$100 MILLION
STRONG LIQUIDITY
CASH PRIORITIES
FORTIFYING THE BALANCE
SHEET
INVESTING BEHIND FIVE STRATEGIC
IMPERATIVES
FUELING LONG-TERM
GROWTH
FISCAL 2021 GUIDANCE REMAINS SUSPENDED
RETURN TO NORMALCY
SHORT-TERM UNCERTAINTY
LONG-TERM MODEL
SALES
LONG-TERM ECONOMIC MODEL
Scenario #1WITHOUT significant space gains or strategic extensions
Scenario #2WITH significant space gains
and strategic extensions
ADJUSTED EBITDA
LOW TO MID SINGLE DIGIT NET SALES CAGR
OUTPACES SALES GROWTH
MID TO HIGH SINGLE DIGIT NET SALES CAGR
OUTPACES SALES GROWTH
MODEL AS PRESENTED IN PRESS RELEASE AND EARNINGS CALL ON FEBRUARY 5, 2020. CAGR REPRESENTS EXPECTATIONS OVER A 3 YEAR TIME FRAME, EXCLUDING COVID-19 IMPACT.
TARANG P. AMIN CHAIRMAN &
CHIEF EXECUTIVE OFFICER
85
WE HAVE THE RIGHT TEAM
TARANG P. AMIN CHAIRMAN & CEO
MANDY FIELDS SENIOR VICE PRESIDENT & CHIEF FINANCIAL OFFICER
RICHARD F. BARUCH JR. SENIOR VICE PRESIDENT &
CHIEF COMMERCIAL OFFICER
SCOTT K. MILSTEN SENIOR VICE PRESIDENT, GENERAL COUNSEL, CORPORATE SECRETARY
& CHIEF PEOPLE OFFICER
KORY MARCHISOTTO SENIOR VICE PRESIDENT & CHIEF MARKETING OFFICER
FANNY XU VICE PRESIDENT, GENERAL
MANAGER, CHINA OPERATIONS
EXECUTIVE TEAM
Highly-experienced, blue-chip background executive team with proven experience managing and growing brand portfolios
JOSH FRANKS SENIOR VICE PRESIDENT,
OPERATIONS
MILLENNIAL
60%FEMALE
73%DIVERSE
46%
TARANG P. AMIN CHAIRMAN & CEO
TARANG P. AMIN CHAIRMAN & CEO LAUREN COOKS LEVITAN RICHELLE P. PARHAM
BETH M. PRITCHARD LEAD INDEPENDENT DIRECTORKIRK L. PERRY SABRINA L. SIMMONS
MAUREEN C. WATSON RICHARD G. WOLFORD
(OUT OF 4,800 PUBLIC COMPANIES)
1OF 9
PUBLIC COMPANIES WITH OVER
67%
WOMEN ON BOARD OF DIRECTORS
WE HAVE THE RIGHT TEAM
LORI KIETH
WE KNOW OUR CONSUMERS AND HOW
TO ENGAGE THEM
INSTAGRAM FOLLOWERS
TIKTOK ENGAGEMENT
MILANI: 3.8M
WET N WILD: 3.1M
COVERGIRL: 2.9M
REVLON: 2.6M
ANNUAL TRAFFIC (US+UK+APP)
30M
MOBILE TRAFFIC
80%
#1 MASS E-COMMERCE SITE
LOYALTY MEMBERS
2.0M
BEAUTY PROFILES670K
UNIQUE ANNUAL VISITORS (US+UK+APP)
17M
FOLLOWERS (JUNE 2020)
5.5M
MASSIVE AUDIENCE REACH
$68M EMV (FY 21 Q1) +13% YOY
TOTAL E.L.F. FOLLOWER BASE
37MTOTAL SOCIAL FOLLOWERS
(ACROSS TOP PLATFORMS)
8.9M
VIDEO CREATES
4.5M#EYESLIPSFACE VIEWS
6.2B
#1 MOST VIRAL CAMPAIGN IN TIKTOK US HISTORY
GEN Z PREFERENCE
#4 FAVORITE TEEN BRAND (UP FROM #6 LAST YEAR)
Source: Piper Sandler ‘Taking Stock With Teens Spring 2020’
WE KNOW HOW TO MAKE PRODUCTS
PEOPLE WANT100+ new items per year
300+ ideas in pipeline
Highly integrated innovation team
Robust insights from#1 mass e-commerce site
BRUSH BRAND #1 FACE BRUSHES #1 EYE BRUSHES
#1
NIELSEN U.S. XAOC, L52 WEEKS ENDING 6/13/20
PRIMER BRAND #1 AND #2 PRIMERS
#1
#2 and #3 EYEBROW PENCILS
#1
SETTING SPRAY BRAND
#1
EYE LASH CURLER BRAND
#1
WE MOVE AT E.L.F. SPEED
From concept to digital commerce in as
few as 13 weeks
First to market, first to mass
THIRD PARTY SUPPLIERS FROM FILLERS TO
COMPONENT SUPPLIERS IN CHINA
30E.L.F. SHANGHAI
EMPLOYEES IN PRODUCT DEVELOPMENT, SOURCING
AND QUALITY
69
BUILDING OUR 1ST
MANUFACTURING PLANT IN
SO. CALIFORNIA
COST + QUALITY + SPEEDBEST COMBINATION OF
250KSQ FT RETAIL
DISTRIBUTION WAREHOUSE IN SO. CAL.
WE HAVE WORLD-CLASS OPERATIONS
Horizontal integration with like-minded suppliers provides utmost control
Dedicated quality team focused on quality assurance & control
State of the art automated DTC fulfillment in Columbus, OH with ability to customize
Distribution warehouse recognized as best in class by retailers
WE KNOW HOW TO WIN IN MARKET
From 11K to 110K total linear feet in retail in last 5 years
Highest productivity of sales per linear foot in Target & Walmart
Highly experienced team partnering strategically with leading global retailers
DISTRIBUTED IN OVER
25K RETAIL DOORS
NIELSEN XAOC L12 WEEKS ENDING 6/13/20
WE KNOW HOW TO BUILD
BRANDSFrom a mono-brand company
to a multi-brand house
Selectively pursuing acquisitions and incubating new brands
THANK YOU