elf Beauty, Inc. shares (NYSE:) rose 1% in premarket trading Thursday, erasing sharp losses the company suffered earlier as the company’s fiscal 2025 financial guidance fell short of analysts’ estimates.
For the fourth quarter ended March 31, 2024, elf Beauty generated adjusted earnings per share (EPS) of $0.53, $0.20 above analysts’ consensus estimates of $0.33.
Revenue rose 71% to $321.1 million, beating expectations of $292.14 million. This marked the company’s 21st consecutive quarter of net sales and market share growth, with net sales up 77% to top $1 billion for the fiscal year .
Despite strong fourth-quarter results, elf Beauty shares fell 10%, primarily due to its fiscal 2025 guidance.
The company forecast adjusted earnings per share of $3.20 to $3.25, below the consensus of $3.56. Additionally, fiscal 2025 revenue is forecast to be between $1.23 billion and $1.25 billion, compared to analyst consensus of $1.27 billion.
“Fiscal 2024 was our strongest year of net sales growth ever, continuing the exceptional, consistent and category-leading growth we have achieved,” said Tarang Amin, chairman and CEO of elf Beauty.
He attributed the success to the company’s expansion into cosmetics, skin care and international markets.
Gross margin increased approximately 330 basis points to 71% due to favorable foreign exchange effects, cost savings and lower transportation costs.
In post-report comments, analysts said they continue to view ELF as a better idea after another better-than-expected quarter “and remain confident there is still plenty of runway here despite lighter FY25 guidance year”.
“While this is true across all geographies, we want to place increased emphasis on the international region, where additional countries and shelf space are being added rapidly and the opportunity to drive continued strong DD, even triple-digit segment growth,” they wrote.
“Expectations and current share levels do not appear to fully account for this and coupled with continued strong earnings and earnings we encourage investors to buy at these levels.”