e.l.f. Beauty, Inc. (NYSE:ELF) shares rose 1% in premarket trading Thursday, reversing sharp losses it previously incurred due to the company's financial guidance for fiscal 2025 falling short of analyst estimates.
For the fourth quarter ended March 31, 2024, e.l.f. Beauty achieved adjusted earnings per share (EPS) of $0.53, which was $0.20 higher than the analyst consensus of $0.33.
Revenue surged 71% to $321.1 million, surpassing the expected $292.14 million. This marked the company's 21st consecutive quarter of net sales and market share growth, with a 77% increase in net sales to over $1 billion for the fiscal year.
Despite the strong fourth-quarter performance, e.l.f. Beauty's stock experienced a 10% decline, primarily due to its fiscal 2025 guidance.
The company forecasts adjusted EPS between $3.20 and $3.25, below the consensus of $3.56. Additionally, revenue guidance for fiscal 2025 is projected to be between $1.23 and $1.25 billion, compared to the analyst consensus of $1.27 billion.
"Fiscal 2024 marked our strongest year of net sales growth on record, a continuation of the exceptional, consistent, category-leading growth we’ve delivered," said Tarang Amin, Chairman and CEO of e.l.f. Beauty.
He attributed the success to the company's expansion across cosmetics, skincare, and international markets.
Gross margin improved by approximately 330 basis points to 71%, driven by favorable foreign exchange impacts, cost savings, and improved transportation costs.
In their comments following the report, analysts said they continue to view ELF as a top idea after another better-than-expected quarter "and remain confident that there is plenty of runway left here despite the lighter FY'25 guidance."
"While true for all geographic, we want to place increased focus on international, where additional countries and shelf space are quickly being added and have the capability to deliver continued strong DD to even triple digit segment growth," they wrote.
"Guidance and current share levels don't look to be fully baking this in, and when combined with ongoing healthy margins and returns, we urge investors to be buying at these levels."