What happened
Shares of cosmetics company e.l.f. Beauty (ELF -0.01%) 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.
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.
