e.l.f. Beauty Stock

e.l.f. Beauty, Inc. operates as a multi-brand beauty company that offers inclusive, accessible, clean, vegan and cruelty-free cosmetics and skincare products.

Brands

The company’s family of brands includes e.l.f. Cosmetics, e.l.f. SKIN, Well People and Keys Soulcare. The company’s brands are available online and across leading beauty, mass-market and specialty retailers. The company has strong relationships with its retail customers, such as Target, Walmart, Ulta Beauty and other leading retailers that have enabled it to expand distribution both domestically and internationally.

e.l.f. Cosmetics

e.l.f. Cosmetics has made the best of beauty accessible to every eye, lip and face. The company makes clean, premium-quality, prestige-inspired cosmetics at an extraordinary value. The company offers a range of products that are vegan and cruelty-free. As one of the first digital disruptors, e.l.f. continues to attract a highly engaged audience, leveraging social and digital platforms to connect with its community.

e.l.f. SKIN

The company creates targeted, ingredient-focused, dermatologist-developed formulas for every eye, lip, face and skin concern. The company offers a range of products that are vegan and cruelty-free.

Well People

Well People has raised the standard for plant-powered, high-performance beauty. A clean beauty pioneer with approximately 100 EWG VERIFIED products, Well People was founded so that all people can be well people with dermatologist-developed, super-clean and planet minded products.

Keys Soulcare

Keys Soulcare combines skin-nourishing offerings with soul-nurturing rituals to care for the whole self. The company’s skincare formulas are also clean and cruelty-free.

Each of the company’s brands is certified by People for the Ethical Treatment of Animals (PETA) as ‘Global Animal Test-Free’, a credential given to companies and brands who have verified that their own facilities and their suppliers do not conduct, commission, pay for, or allow any tests on animals for their ingredients or finished products. In addition, each of the company’s brands is certified by the Leaping Bunny Program.

The company’s products are formulated with ingredients that have the health and safety of its consumers in mind. Well People's product-line includes over 100 EWG VERIFIED products, a leading standard of ‘clean and healthy’ in the beauty space.

Marketing and Digital

The company deploys a consumer-centric marketing model. The company builds brand equity and drive traffic to its national retailer partners and to its own e-commerce websites and mobile applications primarily through digital and social media, as compared to legacy beauty brands that often seek to engage consumers primarily through traditional media, such as magazines, newspapers and television. The company’s consumers have been its best advocates through strong word of mouth. Many of the company’s consumers are active in social media, write reviews of its products online and generate content on Instagram, Facebook, Twitter, TikTok, YouTube and other social media platforms.

Markets

The company operates across beauty categories, including eye, lip and face makeup, beauty tools and accessories, and skincare products. Color cosmetics and skincare products are broadly sold through food, drug and mass channels, as well as through department stores and direct and specialty channels.

Distribution

The company employs an omni-channel distribution strategy and sells its products with national retailers in the United States, as well as internationally. The company also sells its products online through its own direct e-commerce channels, as well as through other e-commerce websites. The company’s main channels of distribution are described below.

National Retailers: The company sells its products in the United States primarily in the mass, drug store, food and specialty retail channels.

e-commerce: e-commerce is an important component of the company’s engagement and innovation model. The company’s roots as an e-commerce company and its digital engagement model drive conversion on its e-commerce websites and its mobile applications, where it sells its full product offerings. The company’s products are also available at other e-commerce sites, making its products widely accessible to its consumers.

International: The company’s products are also sold in a number of international markets, including the United Kingdom (the U.K.) and Canada.

Customers

Along with its direct e-commerce channels, the company has strong relationships with its retail customers, such as Target, Walmart, Ulta Beauty and other leading retailers that have enabled it to expand distribution both domestically and internationally. Target, Walmart and Ulta Beauty accounted for 25%, 20% and 15%, respectively, of its net sales in the year ended March 31, 2023.

Seasonality

The company’s results of operations are subject to seasonal fluctuations, with net sales in the third and fourth fiscal quarters (year ended March 31, 2023) typically being higher than in the first and second fiscal quarters. The higher net sales in the company’s third and fourth fiscal quarters are largely attributable to the increased levels of purchasing by retailers for the holiday season and customer shelf reset activity, respectively. Fluctuations throughout the year are also driven by the timing of product restocking or rearrangement by the company’s major retail customers, as well as expansion into new retail customers.

Trademarks and Other Intellectual Property

The company’s primary trademarks include ‘e.l.f.’, ‘e.l.f. eyes lips face’, ‘e.l.f. SKIN’, ‘Well People’, and ‘Keys Soulcare’ all of which are registered or have registrations pending with the U.S. Patent and Trademark Office for its goods and services of primary interest. These trademarks are also registered or have registrations pending in various foreign countries in which it operates. The company also has other trademark registrations and pending trademark applications for product names and tag lines. In addition to trademark protection, the company owns the U.S. Design Patents covering packaging, make-up tools and brush handle shapes and it owns numerous domain names, including the domain names of its e-commerce websites.

Government Regulation

The company and its products are subject to various federal, state and international laws and regulations, including regulation in the United States by the FDA, the Consumer Product Safety Commission (the CPSC), the Federal Trade Commission (the FTC), and regulations outside of the United States by Health Canada and the European Commission, among others. Further, as the vast majority of the company’s products are imported from overseas manufacturers, it is subject to Customs Border Patrol clearance regulations prior to goods being released into the United States market.

In addition to its cosmetic products, the company markets certain non-prescription drug products, including certain products that are intended to treat acne or be used as sunscreens, which are regulated as over-the-counter (OTC) drug products by the FDA. Certain OTC drug products are subject to regulation pursuant to the FDA’s ‘monographs’, which provide rules applicable to each therapeutic category of non-prescription drug, and establishes conditions, such as active ingredients, uses (indications), doses, labeling, and testing procedures, under which an OTC drug within that particular category may be generally recognized as a safe and effective (GRASE), and therefore can be marketed without obtaining pre-market approval of an new drug application (NDA) or abbreviated new drug application (ANDA).

History

The company was founded in 2004. It was incorporated as a Delaware corporation in 2013 under the name J.A. Cosmetics Holdings, Inc. and changed its name to e.l.f. Beauty, Inc. in 2016.