Oakland, California-based cosmetics company E.L.F. Beauty has reaffirmed its fiscal year 2020 guidance, despite seeing a "significant decline" in recent retail sales due to the COVID-19 pandemic.
In early February, the company raised its fiscal 2020 guidance as the brand saw particular success with Gen Z and millennial consumers, forecasting full-year net sales to fall between $274 million and $277 million. E.L.F. has now reaffirmed this guidance "due to the strong execution of its five strategic imperatives."
The guidance reflected net sales up seven to eight percent year-over-year, excluding the contribution of E.L.F. retail stores.
Despite this confidence, E.L.F. said that it has seen a significant decline in retail sales over the last two weeks "due to the impact of COVID-19 on consumer behavior."
As a result, the company said it anticipates its sales and Nielsen tracked channel results to be negatively impacted until consumer spending returns to normal.
As of March 30, the company had approximately $45 million in cash on hand and access to a $50 million dollar revolving credit facility. The company said it is seeking to reduce working capital, better match marketing expense to demand, and explore other areas to reduce operational costs.
“During these challenging times, we are focused on the safety and well-being of our employees and the consumers that we serve," said Tarang Amin, the company's chairman, and CEO.
"We are pleased that in this environment we are able to reaffirm our fiscal 2020 guidance. We are seeing a change in consumer behavior due to the COVID-19 pandemic and anticipate that our sales and Nielsen tracked channel results, while better than the category, will be significantly depressed during this time. Our liquidity is strong and we are proactively managing to spend. We remain confident in our long-term growth potential given our proposition of delivering prestige quality cosmetics and skincare at an extraordinary value.”
The company announced that its China operations are back to normal run rates and U.S. distribution centers are currently fulfilling national retailers and e-commerce orders. In addition, E.L.F. said its inventory position remains sufficient to supply Walmart, Target, other retailers, and to sustain online needs.
E.L.F. will report fourth quarter and fiscal year-end 2020 results on May 21, 2020.