Executive summary: elf Beauty delivered a landmark quarter and a strong fiscal year. In Q4'24, net sales rose 71% year-over-year to $321.1 million, contributing to a full-year net sales increase of 77% and the achievement of over $1 billion in annual net sales. Gross margin expanded roughly 180 basis points in Q4 and approximately 330 basis points for FY'24, while adjusted EBITDA surged about 93% in the quarter and 101% for the full year, underscoring the companyβs ability to translate top-line momentum into profitability. Management credited three enduring pillarsβvalue proposition, product innovation, and a disruptive marketing engineβas the engine of category-leading growth. International growth accelerated meaningfully (Q4 international net sales up 115%), and Naturium, acquired in October, contributed meaningfully to net sales in Q4 and is central to near-term and longer-term growth plans.
Execution remains differentiated by a highly efficient go-to-market, rapid market-share gains in color cosmetics and skin care, and a meaningful expansion in international penetration. Despite macro uncertainty and some cost headwinds (notably transportation and FX effects in FY'25 planning), management outlined a disciplined, quarter-by-quarter approach to the FY'25 outlook with a 20β22% net sales growth target and modest gross-margin expansion (roughly +10 bps year-over-year). The company signaled continued aggressive investment in marketing and digital channels (roughly 24β26% of net sales in FY'25) to sustain the flywheel. Investors should monitor: 1) Naturium integration and Ulta launch execution; 2) international rollout cadence and space gains at CVS, Walmart, and Sephora Mexico; 3) evolving freight, FX, and retailer activity costs that influence near-term gross margins; and 4) the path to continued EBITDA margin expansion as top-line momentum converts into operating leverage.