e.l.f. Beauty CEO: Our ‘incredible value equation’ drove momentum in Q1

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The beauty industry has seen a shift in consumer behavior as shoppers grapple with rising costs and economic uncertainty, forcing some to stray from high-end products.

For value-oriented cosmetics companies like e.l.f. Beauty (ELF), consumers wanting to trade down is a welcome sign.

"We have this incredible value equation of premium quality products at these extraordinary prices, which really resonate with consumers," e.l.f. Beauty CEO Tarang Amin told Yahoo Finance Live (video above).

The beauty brand reported fiscal first-quarter earnings of $0.39 a share on August 3, beating Wall Street estimates. The company also marked the 14th straight quarter of net sales growth as it looks to gain market share.

e.l.f., which tends to skew towards younger consumers, leaned on innovation and a "unique ability to bring things that used to be in prestige or take inspiration from our community and really make them at these accessible price points," Amin said.

E.L.F. cosmetic products are seen for sale in a store in Manhattan, New York City, U.S., June 29, 2022. REUTERS/Andrew Kelly
E.L.F. cosmetic products are seen for sale in a store in Manhattan, New York City, U.S., June 29, 2022. REUTERS/Andrew Kelly · Andrew Kelly / reuters

According to Amin, the average price point for an e.l.f. beauty product is a little over $5, compared to a $9 average for competitors in the space. The beauty brand's skincare products have also been able to keep up by offering products at a starting rate of $4.

"We're really winning in both categories," Amin stated on momentum in both color cosmetics and skincare.

"I think what you see is definitely see people wanting to go out more, which is, I think, great for the overall color cosmetics category," he added. "It also shows our skincare strategy is working, particularly our ability to bring these great products at great prices."

The company said it did raise prices on some products in the second quarter in order to offset higher costs from foreign exchange rates, tariffs, and shipping prices.

"We've been able to weather that headwind pretty well if you saw in terms of our results, primarily by pricing behind some of the external costs that we've seen, first in tariffs, and then most recently, because of the transportation costs," Amin explained.

While the company does not issue quarterly guidance, Amin said that for its full-year guidance, the company doesn't expect foreign exchange "to be a huge headwind. We think that really impacted us more last year."

"I think transportation continues to be elevated," he added. "And I think that, again, all of that's been factored into our raised guidance, so I feel pretty good in terms of where we stand."

Edwin is a producer for Yahoo Finance. You can follow him on Twitter @Edwin__Roman.

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