What happened
Shares of cosmetics company e.l.f. Beauty (ELF +1.66%) soared on Thursday after the company reported third-quarter financial results for its fiscal 2023 and raised its outlook going forward. As of 12:40 p.m. ET, e.l.f Beauty stock was up 14%.
So what
e.l.f. Beauty makes cosmetic products that are primarily sold at big-box retailers -- Walmart and Target combined account for nearly half of the company's sales. But the company also sells products through its e-commerce channels. And sales are doing well all around. According to yesterday afternoon's report, Q3 net sales were up 49% year over year to $146.5 million, thanks in part to market-share gains in the cosmetics space.
NYSE: ELF
Key Data Points
Particularly encouraging to investors was the sharp acceleration in e.l.f Beauty's growth. In the first half of its fiscal 2023, net sales were up 30% from the comparable period of fiscal 2022. However, the company looks to be hitting its stride with the 49% growth rate in Q3.
Now what
With its Q3 report, e.l.f Beauty's management raised its full-year fiscal 2023 guidance for the third time in as many quarters. The company started the year forecasting revenue of $440 million at best. Now it believes it will have net sales of at least $541 million -- a mind-blowing improvement.
Moreover, e.l.f Beauty is growing profitability, which bodes well for its prospects moving forward. In fiscal 2022, it earned adjusted net income of $45.2 million. For fiscal 2023, it's expecting between $75.5 million and $77 million.
Trading at over 8 times trailing sales, e.l.f. Beauty stock isn't cheap. But it's certainly backing up its premium valuation with superb growth.
