ELF - Earnings call transcript Q1 2020

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Operator

Greetings. And welcome to e.l.f. Beauty’s First Quarter Fiscal 2020 Earnings Results. At this time, all participants are in a listen-only mode. A brief question-and-answer session will follow the formal presentation. reminder, is a recorded. As Instructions] this being conference [Operator

conference to Willa I like the over begin. would now Please turn to you. McManmon. Thank

Willa McManmon

discuss section of also XX today’s Thank us release call is fiscal everyone. will for the press A earnings e.l.f. Investor days recording in to the Relations XXXX copy afternoon, for quarter elfcosmetics.com. Beauty’s on be A Good results. available available elfcosmetics.com. first of you today joining of

based contains including unknown call are beliefs forward-looking the this on reminder, actual are and statements, management’s known risks assumptions, that These company’s a therefore, and those results estimates expectations, and As uncertainties, subject to outlook, and differ statements may to and fiscal projections. XXXX relating materially.

results implied expressed from detailed actual to company’s statements and are Important differ by today’s forward-looking filings. factors or press release SEC in the may those such that cause

for We differences non-GAAP In to most today’s addition, on and presentation GAAP presented the directly release a reconciliation information the company’s comparable today measures. you refer the includes non-GAAP a of basis. presentation press between the

are Amin, With management today Officer. Chief Vice Officer; President Fields, Tarang me and Financial Executive Chairman and and from Mandy Chief Senior

call Tarang. over turn I’ll that, With the to

Tarang Amin

us. afternoon thank for you Good and joining

our quarter by of $XX.X with of net million. sales million encouraged We’re first and results $XX adjusted EBITDA

Excluding up sales ago. X% were e.l.f. net stores versus a year

and our In our recharge each strategic far. imperatives. our are brand raising making like We��re see of We’re early guidance. with fiscal on progress the days initial we pleased of we're the what turn, in XXXX so we we

quarter on across Let during imperatives. made you the me update progress we’ve each

brand. off face. we a step-up of digital in showcases assets our best and [e.l.f. the digital] launched to fast lip unique campaign, the in driving missing support start. of digital and every brand two-imperatives e.l.f.’s eye, the June, of demand a attributes accessible first the make amazing beautify The which our for In major to are Our

to are completion improvements versus These out. saw Google trends impressions messages Search to our to and EMV relative consumers indicate in Since our with campaign category double our digit video resonating Since seeing metrics choosing that goals. cosmetics completion our the a soft trends double in started, watch are content initial these we’re you measures. January, and opting as

these XX-weeks Nielsen e.l.f. shares drove Collectively, efforts basis reporting XX share gains points. dollar the X.X%, with in up of last

our highly responsive and been has the is our awareness elfcosmetics.com. to brand efforts brand Our to lift marketing retailers to brining new in and consumers

growth site last quarter, double versus the digit increases conversion saw our year. and For ecommerce in revenue traffic

more consumer people are to consumer digital brand, the the experience, This program. In bringing a enable transforming loyalty addition Beauty e.l.f. better technology. we revamp to will including Squad journey a through

features Squad, such at purchases now and allow Walmart, Ulta which retailers has better allowing Beauty, for technology will scanning Target, us Beauty national members, our receipt enhancements points connect made along data enable X.X in-store to personalization. stores. earn drug consumer This to to members other million as will

our the to refrigerator influencers mini-e.l.f. the cool launch to new featuring hero keep summer this pop launch custom limited-edition jelly targeted of box was with first we influencers ramp our playful like quarter, pop mailings receiving a up jelly and to months. products during out In collection pop The events jelly XXX collection. continue supportive reach hot

been our than Jelly million positive to has followers of X posted greater times average their XX over Instagram. in Instagram pop engagement content posts. on influencers Mega combined reviews on

new and outreach, influence steady In we supported monthly of with content. addition digital collaborations to calendar have a our giveaways

this followers of our has X.X million. over grow All to helped Instagram

third imperative. are to quality We our speed cost leveraging unique and combination our of drive

an providing by first prestige on extraordinary quality at focus products value. Our mass to

best primer on Primer, the recently which Putty hero UK called focused Daily We Mail supporting like Poreless the are our products ever.

e.l.f. one item June, In number Poreless Ulta, at was Walmart, and elfcosmetics.com. Target, Primer Putty the

also new in to launched flex X,XXX favorably prestige. displays the strength are locations. concealer Walmart We in leading the X,XXX XX-hour We Target in compares sponge plus our Camo towers e.l.f.’s which of Concealer, stores Camo leveraging and Camo

continue amplify truly products XXX° a digital to make our marketing to activation. through this these We

Our national retail fourth on-track X imperative, our across Unicorn at retailers improving Project is largest productivity with Phase complete national of partners.

quarter, the channels as include channels, productivity we During our and Ulta. improvements in on-track track saw within as Walmart, as Target such which our well

of from more the project and all channels. brushes spring and items this Unicorn, merchandising across mostly of is retailers. introduce packaging covers planned we Phase segments. set, where X the we’re for XXXX visual merchandising across seeing Phase new will starts enhancements month Unicorn, With growth in product which X Unicorn better

strategic fifth offset help marketing our to generating spend. is Our increased imperative cost savings

our e.l.f. reminder, February. most our XX initiative a was closing in stores significant As

expect million We and in savings this marketing our $XX.X from the to to initiatives. digital redeploy

started California be In of to expect by and fully end addition, center automation we September. our Ontario, distribution the running

expect year. end be fiscal by to the Our the is U.S. and schedule facility operational of fill liquid on

to lean chain We China operations manufacturing $X supply in savings to around we cost these year. this Combined, also expect continue techniques. million using strengthen provide our efforts

Mandy update, and in results that detail. turn guidance discuss now the With more I'll to call over to our

Mandy Fields

XX X% driven Thank of Net stores, you, months across excluding key the results now productivity from Tarang. increased retailers of and were on I’ll by June fiscal year-ago, XXXX sales e.l.f. three compared for XXXX. ended elfcosmetics.com. up as discuss to million strength quarter first the the XX,

we and XX% favorable on imperative. closure of rates behind and continued innovation, the momentum goods, success XX% exchange As impact our our Chinese tariffs strategic was Tarang Unicorn. our flat retail stores. to vendor digital with the of accretive prior Gross The Project the offsetting and investments the of of of we’re foreign are discussed, year progress seeing concessions, margin margin with sales and marketing pleased

the brushes August of were tariffs and QX, in On cover XX% our impact that goods. not by XX% at effective yet additional level, Note announced our X, which September which tools. tariff would most were gross our X, margins of impacted

and offset initiatives. of rate to expect selective increases, impact FX, savings price the We margin cost through tariffs

cost as XX%, of and SG&A period digital in basis, sales of sales was stores, the closure adjusted partially by driven XXXX, savings same from increased an to initiatives. percentage in marketing a XX by investment our of compared mainly XX% net offset On e.l.f. of our the

As to be so quarter, XX% of marketing we last year. to discussed spend on XX% net e-commerce expect a sales plus

net or per In million share, compared million QX, XX marketing a diluted and the e-commerce was was spend or year of to EBITDA ago in Adjusted year million $X.XX ago. share at net X% per XX.X up XX% $X.XX compared million X.X X.X quarter. XX% sales, versus ago. year to Adjusted diluted income a was

operations of balance cash was the million to driven operating capital XXXX, cash quarter bringing with a June from compared disciplined year. XX, results. XX.X in improvement primarily our as million of improved We million generated XX.X The our inventory last coupled working balance management XX.X and across cash of by flow receivables, to

up we program repurchase $XX QX, of repurchased the announced In Last share we shares. quarter, XX,XXX to approximately million.

As behind we evaluate key our consumer unchanged. allocation to our strategic excess remains plan cash brand increase prioritize capital position, investment strategy awareness initiatives We to relevancy. build our and

through cash to long-term return in and are we through to We evaluate we made our We to shareholders extension fuel growth. investments repurchase and leverage our to excess the strategic well-positioned free believe our initiatives to fund platforms program. will also flow cash continue

our outlook. and QX our and results turning XXXX digital from our to are marketing raising we Now, our an XXXX initial on fiscal investments, fiscal strong guidance. progress Based

ranges. post We X% previously is impact expect XXXX, upward be of X% fiscal From X net net versus excluding revisions e.l.f. the flat guided. This to the from our sales range EBITDA, to negative down that stores. adjusted EPS to the and negative up income to

EBITDA a are $XX with and EPS XX.X share track fully We expect recent diluted per trends. basis adjusted million $XX the Many our you between count XX million, data adjusted of closely on net of income adjusted very million, XX channel by million million. share of $X.XX to encouraged are and and and monitoring $X.XX between

top strength improved balances with shipments. line Our seasonal and increases lower recent and price guidance pipeline the

in to price Let the help XX% the first July, a initiated In history, of mitigate approximately third on impacting we impact of late for me provide some e.l.f.’s SKUs our perspective time this. increase tariff. a

and quarter have of have coming yet will how to long volume we affect understanding see more have elasticity data. second better out in term sure the We the when this our a

in this approach business, year. having of XXXX, be will seasonal XX they’re and pipeline anticipate we we outlook. while and we in Additionally, balanced million not with volume fiscal QX in from Therefore, taking the cycling the a the to do QX strength encouraged XXXX that recent are

tell in quarter the forward I the with quarters. this round I to can't to coming our how am progress first company, part continued of As be proud out look on extraordinary brand. a the behind amazing I you team you full updating I my

questions. the that operator, you may With call to open

Operator

you. Thank Instructions] [Operator you. Thank

the Please question first Wissink proceed. Our with Steph comes of from Jefferies. line

Steph Wissink

think momentum EBITDA at And you. in Mandy put this afternoon how looked inventory you one well, Delta you XX rate, first and comfortable I at in annualized to channel for just at Good you the run Thanks. your close and it look that track quarter versus would the million keep the to run we the to if for of number whether Thank of the If and data we the kind enough going or about bridge with everyone. it’s of would then is question respect guidance versus I I spending conservatism the just your we million that channel midpoint rate? about imply, us you. guidance, to where done the look away XX throw take do? can plan could $XX million, hit you consumption? contextually? haven't that How your which you some are help just have you that should as Tarang,

Mandy Fields

Alright, of the question. Steph. part the take first I'll

good QX, news have the when we closures really So, marketing. at and some store looking from

one those have didn't QX that to in year said previously, level offset marketing. will two quite with we XX% We another. the for get As

back So, a run have I you if to to would you’re say rate piece would forward. trying peel that somethings that would

recall, about you naturally rate XXX basis if points rate, closure of with year margin we be our the said Additionally, stores, our will margin our on lower. that the

to in margin Well fact rate quarter, had this flat year. we last

some able were and that concessions rate gains through margin to recoup like vendor keep FX helped we in to and things that the So, line.

do as say, still basis from success I points closures, the that also, that would year that marketing, I as XXX then their downside just to go say spend given and keep the rate, we’ve on XX% on we in would back I your on store the to should the say the you So, plan margin the model, seen. would you a closer early into

Tarang Amin

with And track enough having to your comfortable inventory channel then strength we’re data the are in are pleased picking our meet and that to up and second ability Steph, on very share we seeing of question, in terms demand.

planning a that horizon where always customers we approach think, and I inventory can efficient in and manner we have bring where of very our well. had are in we’ve enough an that carry as enough inventory

continue good we terms demand. right now So, feel ability in to our to meet of

Steph Wissink

you. Thank

Operator

you. Thank

with Our & comes of the Cowen Please line proceed. next from Oliver question Chen Co.

Oliver Chen

Hi, thank you.

price thoughts what are that levels? you are the and Unicorn? your you your have to how to Regarding trying optimize and Project increases in-stocks level that was increases, to approach you love just terms interplay picked skews with the that satisfied may of Does third relates fixed within also of and stock price what your We thoughts? in of the how

Tarang Amin

Tarang. Oliver. Hi, Sure. This is

really SKU and kind the analyze Our really each who where SKU go and else approach pricing manufacturers, pricing SKU of was on might set see pressure. face competitors to by

the look a taking have value to equation. addition where at did we In best

took – So, those and robust most we of SKUs. a approach had have look really the of room. of pretty by this we where going to pricing at it kind SKU kind saying, long-time we do each we on And took and

pricing terms kind ability in-stock I year in-stock, pretty In far average now of meet the good will offset up so in terms feel by retails in to of going unit units. certainly we’re result about where trending levels, this of our

on tell the And so, I you a will then major it have levels, last expect healthy. in-stock to balanced is, you approach. I I a stay And wouldn't is thing those impact think

because through. mainly our on well pass we call, balance cost we’re we pricing outlined have our to as approach being able FX, to to as this terms savings that fully of also So, tariffs, not in not the the all

Oliver Chen

as wholesale Okay. the as that tweaks Beauty regarding It And from interesting data making program, in more a of your your partners. through about Squad. was just thoughts to purchases follow-up well capturing terms

see you what to made of So, needed cetera? that do changes be kind where to drive engagement et heading program and more

Tarang Amin

more to I previously kind as Yes, and as often We’ve to and come new and connect this us have of really Tarang our really are go pleased our the from is million Beauty shared we being believe X.X members system again. able purchases, been kind I the more wanted, to their to with many points of think Squad. brand mean takes more Squad. spend site we members so the on and of to that dollar enhance we Beauty program that ability a level loyal well

continue key more what that for And consumer able presence of is staff well our given to we better our about forward in in milestone program, our perhaps personalize we're retailers, to big as how it tell doing and national look their pretty share it’s a experience excited us, as and terms large to but in one you we're sites. very loyalty

Oliver Chen

you. Thank Best regards.

Operator

Thank you.

Bill with of SunTrust next Please comes proceed. Humphrey. Robinson the Our from Chappell question line

Bill Chappell

good Thanks, afternoon.

Tarang Amin

afternoon. Good

Bill Chappell

we of the XX%, sense there are convert year? chunks meaningful are like the you Unicorn can Tarang, kind do are feel where that still benefits, in doing of the us Project to and you a you of back of planning on of seeing is, half XX% just give stores

Tarang Amin

Hi, are Project we Bill. where stand. we feeling Yes, great Unicorn and about

shelf So, initiative is that Project packaging our Unicorn product has and phases. multiple major

with able are to to good and particularly track customers, been we leading segments. packaging, national executed new get majority that items, our at we’re where able retail better feel We obviously So, phase of the navigation, that market you the track. seeing first were better our has that numbers about to volume

us. business, And brush Phase is X, big applying currently really of pretty we’re set. for spring which XXXX being and is Phase implemented, segment On tools the Unicorn then Project to a X, impacts our which

even to product. consumers find to make merchandising sure that's announced will visual products key more we to enhancements our particularly are in our get and new So, to on continue first our product approach, making able regards

the to time, about we're hear the think some seeing us mainly results for quite So, you talk of are continue I going market. to in Unicorn because

Bill Chappell

so in obviously terms Got the for past how it. year? gone know has Mandy, modelling sold of more remainder weeks expecting in affects even goods what just And then couple favorable your or of just [Chinese didn't the of you’re wan] what you’re of cost the the it

Mandy Fields

Yes.

as You're we're that an there had upside right, and to some using we offset tariffs. the

a that’s the whole part our toolkit offset And help so of to tariff. us

Bill Chappell

of Got this before you move. do mean I it. But the put through you, price increases some

or a of So, a little maybe read I as could that bit benefit cushion?

Mandy Fields

price on XX% implemented out brushes No. increases and the Because additional when tools. we before that came

tariffs. say we’re it – would using part all toolkit that and as a I our So, we’re of as we address

Bill Chappell

Got it. you. Thank

Operator

Thank you.

with question of comes Teixeira next Please Morgan. Our from line proceed. Andrea the J.P.

Andrea Teixeira

you. thank Hi,

same as or if just So, history little particular more additional you I I embedding was a additional if in bit guidance is here? shelf faced can with guide, have so timing your you I elasticity is new, guess wondering the and you jelly conservative, XXXX the remarks, some it Poreless no pop that the still some you’re so of no obviously display, the the practice called are it me elaborate for there the understand you of on Any and but Mandy on and Project innovation, Primer takes in these to even prepared assuming seems that the of discussed. puts is Unicorn out

you. I you And if can more tell international little you the can can So, pakers, trends the us? if was on you of wondering squeeze bit elaborate Thank you if guide? a know also,

Mandy Fields

Andrea. Hi

it go the of to international ahead first I’ll I’ll part so Tarang Okay, that piece. and talk the and take pass to

out to to we've in I down So, last call. X. quarter guidance down conservative say up from when not, my would to taken we down X And if it – was that had the our is flat of terms or came and that, guide original X so

I increases So, seeing that and reflecting need that the how of about the But time in volume. do momentum the we we've we're as business. some think taken, certainly, plays price that that impacts how just out see to

I taking with a we're would So, would guidance. conservative. I balanced approach than more it balanced call the

Andrea Teixeira

shelf? additional no right, increases, space shelf no And

Tarang Amin

No previously in terms the their shelf have picking been up space we space at disclosed other we've than already in Ulta subset of of what doors.

the the rolling and been Walgreens have in We in Boots UK. brand up

that those just are the two so previously disclosed. And things we've

guidance We're we in look in one conversations like. of our calendar when for XXXX of time right XXXX the retailers calls And terms of level the category, we terms obviously, how in usually about talk set future what particular, now, have year, strong relative sets and momentum that's in of on that our with in – of to progressing. this shelf how, we how But innovation of position both we're very right business a now, in engaging consumers. terms we're the our in

we're question, your doing That internationally. may how relates last which was to be

We we’re focus are the I'd probably continue UK. to is right say internationally, core now with country what be pleased seeing

You the calling Daily UK heard me the ever. our talk about primer Poreless kind Putty Mail best of Primer

I We if think momentum retail customer about is standing also there great our have longest Superdrug.

at And brand, the We elfcosmetics.com mentioned up have very comps UK Superdrug. growth. exhibiting strong or rolling is our site very in site strong own the Boots as is I previously.

hope but great as in similar us in gives internationally, approach U.S. are it did disciplined our we roll terms the a of out So, continued taking we

and So, are maintain there we're our cruelty-free about our kind in the Germany currently and also our of sell in e-commerce very in early days status. China and of testing brand ability retailers number a to excited

Andrea Teixeira

much. so on. you I’ll Thank Great. it pass

Operator

you. Thank

Mark Our Astrachan next with question comes the from proceed. Stifel. of line Please

Unidentified Analyst

price we recent or Hi, those quick see this your Are a also question on done? is what competitors then with can data, Kimberly scanner in price the shelf? increases. later consistent two-week those from and already the is the had most come to just on that Mark. on And We was have

Tarang Amin

this So, is hi, Kimberly, Tarang.

that. me Let take

on lead we is, elfcosmetics.com. pricing in now right reflected we've what So,

retailers. elfcosmetics.com, even a implementation of see our So, in some prices number with retailers the we’re if current than you will go higher of you on

Others, won't. some already price at reflected. retailers see you'll you So,

is, you at at the into it's will tell come price, less us. higher ship not we can I – product POS What unless

would earlier, months, and And that. go to scanner in over so, the going reflected. to related next see you'll up don't see in implementation I as mentioned we're will average pricing think the we expect question, of related you're units of to see I'd much I down certainly, go retails scanner quite the say, phase. couple you it And And unit But yet. the and that

Unidentified Analyst

sales Okay, year-to-date I great. are as more big if we’ve seen as Thank XXXX. In then just the one skincare almost scanner you. data, And can. full-year for that

you driving get it? that on of all insights any discovery it repeat What's brand? Is do trial or can as in insights have brand, a how So, like you around and loyalty time? the big any have really and do purchases

Tarang Amin

strategic Sure. We're major of a of our pleased It's terms imperative really overall in with of portfolio. of ours kind kind skincare. within

terms skincare even know, you and the category is innovation exception we're the And trends the in kind Global being of at of skincare stronger. over strength the of last able but have. no cosmetics, Global we more level couple the have As of given color bigger so been category, ride of to years least than maybe

is value and our mass kind first creams – excited – extremely is to what's I’m the to key with prestige well. relative some value. the than and in quality year prestige And of tremendous success color entry while an that's to still on skincare bring really our our had unit hydration into skincare players our So, cosmetics our Hydration, this category. a our ability Hello average particularly we've the of basis extraordinary unique in it at done driving higher the are, comes is retail on

particularly expand so, continue us momentum at to think to see Target. with we distribution, going started you're on skincare And skincare, as I

skincare the to skincare test quarter, of on taken successful up of now and continue more off last has full to mentioned chain roll customers. we I As call Ulta a

the very I So, on future, look about but for continue and to we forward personally to talk skincare bullish it.

Unidentified Analyst

Okay, thanks.

Operator

Thank you.

from comes the Erinn line question Jaffray. next Murphy Piper with proceed. of Our Please

Erinn Murphy

And nice I of some about just growth. the what a guess, Great. talk is of the through that is of improvements you. folding pace Can you of double-digit around business. the was I business guess, good balance kind And for driving It you should there? then kind Thanks, afternoon. really the and digital see double-digit think Mandy, then really question we is year? the how my

the of recognize we just lift $X Just assume to just on or transacting going excuse slightly Walmart But second-half incremental just QX as at million that's I at the looking there, of full-year, beat line you're Ulta not that? business kind the that me, the you're versus well beat, to to guide, the trying top Thank looking shelf the as $XX should million back just space. out that weighted, rolling you. based boots the understand – kind with and

Tarang Amin

take Erinn. will is and question Sure. This second. Tarang. I’ll your Hi, the Mandy take first then

tell digital is engaging growth the digital step-up our brand. we're with and sales. described business, we're you earlier, traffic, double-digit strategic imperatives in there are on also pleased what I the support, of kind conversion, in marketing really the So, more specifically, influencers attention driving and seeing our and and bringing to And I consumers

product. is key I'd equally important to say, first on that focus being mass also the of spend our

I whether So, Camo of Putty our Poreless a Primer the it highlighted couple be Concealers. them, or

of surround like consumers Jelly through some Pop, to And amplifying are more that site. consumer brings even of we're our brand. approach, exclusives, driving the sound basically interest kind go So, – which in our the that those limited-edition our real

revamp the not from Squad technology Other we've say and our standpoint initiatives. of of many although, sexy Beauty digitally, of talked personalization there it's with made technology conversion of program. as underpinning lastly, is us then also kind about about, and And the things of to we're I'd some doing I that our the talk some kind the helping a improvements

And us. different digitally a a it great quite that's there's to digitally. mean, up been brand, bit going obviously, even level. important always I step So, to it's on the to native

Mandy Fields

about how the the your on part of Yes. balance year. to And on the of second Erinn, question, think

rolled So, QX, that But QX, July. think you out I of at I the QX, this earlier. about mentioned end just think pricing we do as the have

pipeline the space will were that games mentioned volumes. we of to as well to mentioned waiting that we see So, offset as that we help cycling. that that that Certainly, how seasonal and Tarang some impacts are

kind of should guidance. of the the So, within year balance that's our how frame up

Erinn Murphy

I add And new out Can a could Thanks. Jelly of to feels that's consumer offline? like successful one about if I just just mean, really a talk then if on it's the the Pop. it gate. Okay. been attracting launch you

Tarang Amin

Sure.

it's a we’ve we Jelly kind Jelly what think, on from marketing how So, numbers love that turn a sound on the our of kind seen both level just digital, attention some talked I Pop, number I of – attracted approach as about of as in of to on number Instagram of and engagement. terms Pop, of engagement influencers, alone, of, XX well who million over in a reached surround

we significantly I'd to all your new be to just bring example new of And and Camo on launches, to being of these big whether Poreless pipeline specific innovation in users They Jelly amplify franchise. new we've the users, Primer, more question strength that say another Putty able Concealer. Pop, with have seen our pipeline. it

the on Primer the I Poreless previously think are on the is, Pop think consumers. we're trend that to percentage we're getting we've of seeing new those XX% Jelly similar and related Putty on site I traffic products talked a

really as that about well. we good So, feel

Erinn Murphy

guys. Great. Thank you,

Mandy Fields

Erinn. you, Thank

Operator

Thank you.

Company. comes from of the question with proceed. & Rupesh Please next Our Oppenheimer Parikh line

Erica Eiler

for our is Good taking Rupesh. on afternoon. question. Thanks actually for This Erica Eiler

could you if wondering category overall in was I seeing on what you're category lately rates? in comment mass terms the So, growth of

Tarang Amin

Yes, this Tarang. is

color now with long some in trend soft been quite for how surprised be a strong continuation we've and to mass I'm that's you; seen for quite continues I'll in category mass cosmetics soft. time. the And be skincare. a cosmetics honest has say, color I'd So,

take imperatives in market So, our hope point share, of is, to on we’ll to of the outlined. based strategic kind to view that continue continue share I take

Erica Eiler

we're And and and then space more great. popping seeing then personalization beauty beauty brands. the across more up Okay, with

this more about here You on maybe have talked you that talk how enabled a you receipts, elaborate scanner trend as to about today? personalization. sit you’re Can little we the bit capitalizing

Tarang Amin

Sure.

talked figure that the and on migration of capabilities learning if as to just be particularly first might what approaches, bought, look I some based I site to recommendations you to technology algorithms at So, we had like. to of came about able personalization, better and you other algorithms we're our on and product better else our re-platformed from it better get better tap kind into able out what own

from able the wouldn’t of to especially able getting be better at to profiles tie is, consumer large much to I'm well their national particular Going I we're be recommendations of as being able be better, but behavior experience. excited there consumer consumer as understand able to retailers and the what now even only to would terms that in be actually much really that to a that curate meet better consumer consumers, make in data not customize our with that terms of products able to that recommendations, needs, to overall purchases this to what also mean, better is together well their connected as journey.

be are content what goes of current much the had needed. they're where up some it we've we're what providing So, you you experience based we our messages campaign, also get our ability care core even really brand our in if to animals, where if we to value, kind to content, some lot on our about can messages just digital greater attributes. able the of cruelty-free serving one of a love And customize

initial we're way to we So, say, with our but progress. go, I'm have still a pleased I'd – long

Erica Eiler

great. so it I'll much. pass Okay, Thanks on.

Operator

Thank you.

comes Bolton Linda Our line next Please from question with Weiser proceed. of Davidson. D.A. the

Linda Bolton Weiser

[indiscernible] on also, chain? noticed here it's is than And on entire because retailer at comment Kohl's. in We the massive product your a this interesting, Hi. Nash Can you rather shelf [ph].

at in So, your assortment the Kohl's can versus you mass like give retailers? color on differs how Thanks. some

Tarang Amin

Hi, Sure. Tarang. Linda, is this

entered and starting in a e.l.f. approached by they in did that consumers year we assessment. their them popped wanted last So, being Kohl's of we've as been to see was it brands survey that really

Ulta Kohl's. business Old specialty of I specialty We're as But Beauty. channel-by-channel, our our and our it’s a would as in we're is full together. been our describe channel, partnership for chain we've of with It's specialty in other part Navy obviously, channel pleased what historically in And part players. have been and biggest so, and player we – I look

every what say, channel ask of to would I do some core of retailer And regardless our items. carry we is

and be So, that Kohl's items is with see. it's merchandise have still first we're no early. they different able the or would retailers. some to We're to of Kohl's be what we majority again, our the drive carry other similar that than would uniquely then to Kohl's and each will still pleased that. at relatively carry of retailer and in And year kind likes But

Linda Bolton Weiser

Thank you very much.

Operator

Thank you.

line with comes question Herzog Fargo. Please proceed. next Wells the Bonnie of from Our

Bonnie Herzog

I Hi, follow-on your consider top I guys bottom line? upside to there's thank let it the on if wondering Would you to I'm through had or quick line it, guidance. any question a your guidance. reinvesting flow guess, you.

Mandy Fields

Yes.

upside see Bonnie, as kind I things down X, guidance say, in to say would to the as world flat And negative decisions up to guidance, from X, we we've today. today. to is sales our Certainly, the the see the world to there's and we if that if X those we of that's again, the So, increased where we outpace, let's are making start momentum business. see

Bonnie Herzog

taken you understand offset you've lot you the further most the if the because wondering a – think you back a context, a actual I'm on increase had I mentioned was circling the guys what And you to – it's the of historically. Thinking about I taken I you've that in then took. to little percentage ever I And pricing haven't magnitude, on just Okay. guess tariffs. price pricing trying tariffs. that taken could bit the talk question increase is that

it on any think I'm mentioned elasticity it getting in think wondering successful early, guess, finally, Thanks. And that, this be you then, you've will trying vendor to what confidence or color you will out helpful? could And what's known? but why been move be know, of to the then if ability absorbed, will I So, your be understand any I China? maybe of stick? concessions? or willingness How you manufacturing

Mandy Fields

Okay.

will and the then So, first I'll Tarang. it pass take one to over

have regards so pull. the really pricing the on have So, piece, we levers tariffs, three that we in to to

FX We have then cost vendor concessions or savings, pricing. and

for the pricing that that, give to competitive full I we reasons. did increase earlier But through And we of the the on what so, percentage not pricing. will we're going echo recoup impact is tariffs took said Tarang not

took our tariff impact. the that the within SKUs, offset help of toolkit third one of on we pricing us and So, about levers a the is to

Tarang Amin

their pass those we're I from external attacks. like your of a our also a Yes. to kind we're long of a pricing hearing a and very on is in as number straightforward doing done balanced people XXX% kind of in competitors goes not as it. standpoint. pricing dozens already terms point quite of stick, through. think about will known for it of price mean, I of how putting increases ability consumer I And to being kind approach having been pricing. tariff to time, Most There's and announcing We're it

cost FX, on relying as are as We savings it. well our to do

over million pricing I the and with Mandy of of the balancing then some last, the it's in our terms see But So, seeing, And guidance, like and chain, take it's of years. along pride in as, pipeline things that we supply XX the it's one we're of the year. of $XX things you're kind cycling great approach. said, our one of also strength currently next

I from combination in that to industry. tariff. we've build believe no in our or continue quality And we as built, in of of what been make China, our comes techniques. able I And speed our cost, lot the improvements operations and there, mentioned, lean progress tariff advantage We've core terms a of to and manufacturing best

in more looked always we've we where that, and operate. should to of addition to do how manufacture in terms we want But globally

includes prior to that number any we of initiated tariff. initiatives And so that a

before, and think of that liquid of our distribution fill should our we're have plant operation the done fiscal by with I that automation advance. same if well end building our well an was year, U.S. our done that centers was in So, of

is the to and really us a more it consumer equation take sure of And cost to make efficient, do. get take for the the being that those, marketing like in our we’re and investing best continuing just we'd savings able to value matter that

of in So, market. people in see we'll where couple of terms the feel certainly stand. what I about I we then good our of feel about we good overall years the And currently be kind over approach, think, next updating

Bonnie Herzog

Thank Okay. you.

Operator

Thank Instructions] [Operator you. Thank you.

back to in at questions queue over for further hand floor no have closing Tarang this time. the to Allow We me Amin remarks.

Tarang Amin

Great. Well, everyone, joining us. thanks for again,

our the we’re forward in call. look customer Thanks, days recharge, still the of to everyone. brand our encouraged on response by we're and early consumer next you While and updating

Operator

Thank you. This concludes today's conference.

You may this lines and disconnect time, at your thank for you participation. your

e.l.f. Beauty (ELF) 7 Aug 192020 Q1 Earnings call transcript