– Delivered 23% Net Sales Growth in Fiscal 2022 –

– Gained Market Share for Third Consecutive Year –

– Provides Fiscal 2023 Outlook for 10-12% Net Sales Growth –

e.l.f. Beauty (NYSE: ELF) today announced results for the three and twelve months ended March 31, 2022.

“Our outstanding results in fiscal 2022 underscore e.l.f.’s core value proposition and deep connection with our consumers,” said Tarang Amin, e.l.f. Beauty's Chairman and Chief Executive Officer. "I am so proud of how our team continues to execute in this dynamic environment. We grew net sales by 23% year over year while building market share according to Nielsen. We were the only top 5 color cosmetics brand to grow sales and share above pre-pandemic levels by a wide margin. We believe our competitive advantages and differentiated brand portfolio will continue to fuel our momentum.”

Fourth Quarter Fiscal 2022 Review

For the three months ended March 31, 2022, compared to the three months ended March 31, 2021:

• Net sales increased 13% to $105.1 million, primarily driven by strength in our national and international retailers.
• Gross margin increased approximately 100 basis points to 64.2%, primarily driven by cost savings, margin accretive mix, and price increases, partially offset by unfavorable foreign exchange rates and increased transportation costs.
• Selling, general and administrative expenses ("SG&A") increased $7.5 million to $65.3 million or 62.1% of net sales. Adjusted SG&A (SG&A excluding the items identified in the reconciliation table below) was $60.5 million, or 57.5% of net sales. The year over year increase in SG&A dollars was primarily related to compensation, benefits, and marketing investments.
• The benefit for income taxes was $0.4 million.
• Net income was $1.6 million on a GAAP basis. Adjusted net income (net income excluding the items identified in the reconciliation table below) was $6.9 million.
• Diluted earnings per share were $0.03 on a GAAP basis. Adjusted diluted earnings per share (diluted earnings per share calculated with adjusted net income excluding the items identified in the reconciliation table below) were $0.13.
• Adjusted EBITDA (EBITDA excluding the items identified in the reconciliation table below) was $12.8 million or 12.2% of net sales.

Full Year Fiscal 2022 Review

For the twelve months ended March 31, 2022, compared to the twelve months ended March 31, 2021:

• Net sales increased 23% to $392.2 million, primarily driven by strength in our national and international retailers.
• Gross margin decreased approximately 65 basis points to 64.2%, primarily driven by unfavorable foreign exchange rates and elevated transportation costs. These items were partially offset by price increases, cost savings and margin accretive mix.
• SG&A increased $27.8 million to $221.9 million or 56.6% of net sales. Adjusted SG&A was $199.8 million or 51.0% of net sales. The year over year increase in SG&A dollars was primarily due to marketing investments, compensation, and benefits.
• The provision for income taxes was $3.7 million.
• Net income was $21.8 million on a GAAP basis. Adjusted net income was $45.2 million.
• Diluted earnings per share were $0.41 on a GAAP basis. Adjusted diluted earnings per share were $0.84.
• Adjusted EBITDA was $74.7 million or 19.0% of net sales, up 22% year over year.

Balance Sheet

The Company ended fiscal 2022 with $43.4 million in cash and cash equivalents and $91.1 million of long-term debt and finance lease obligations, as compared to $57.8 million in cash and cash equivalents and $110.3 million of long-term debt and finance lease obligations at the end of fiscal 2021.

Fiscal 2023 Outlook

The Company is providing the following outlook for fiscal 2023. When compared to fiscal 2022, the outlook for fiscal 2023 reflects an expected 10-12% increase in net sales.

“We’re pleased with our exceptional fiscal 2022 results and believe that we can continue our business momentum into fiscal 2023,” said Mandy Fields, e.l.f. Beauty’s Chief Financial Officer.

Webcast Details

The Company will hold a webcast to discuss the results from its fourth quarter fiscal 2022 today, May 25, 2022, at 4:30 p.m. Eastern Time. The webcast will be broadcast live at https://investor.elfbeauty.com/news-and-events/events. For those unable to listen to the live broadcast, an archived version will be available at the same location.

About e.l.f. Beauty

e.l.f. Beauty, Inc. builds brands designed to disrupt industry norms, shape culture and connect communities through positivity, inclusivity and accessibility. Our deep commitment to clean, cruelty-free beauty with unparalleled quality for the price has fueled the success of our flagship brand e.l.f. Cosmetics since 2004 and driven our portfolio expansion. Today, our portfolio of brands includes e.l.f. Cosmetics, e.l.f. SKIN, pioneering clean-beauty brand Well People and Keys Soulcare, a groundbreaking lifestyle beauty brand created with Alicia Keys. Our family of brands is available online, and across leading beauty, mass market and clean beauty specialty retailers.

Learn more by visiting https://investor.elfbeauty.com.

Note Regarding non-GAAP Financial Measures

This press release includes references to non-GAAP measures, including adjusted EBITDA, adjusted net income and adjusted diluted earnings per share. The Company presents these non-GAAP measures because its management uses them as supplemental measures in assessing its operating performance, and believes they are helpful to investors, securities analysts and other interested parties in evaluating the Company’s performance. The non-GAAP measures included in this press release are not measurements of financial performance under GAAP and they should not be considered as alternatives to measures of performance derived in accordance with GAAP. In addition, these non-GAAP measures should not be construed as an inference that the Company’s future results will be unaffected by unusual or non-recurring items. These non-GAAP measures have limitations as analytical tools, and you should not consider such measures either in isolation or as substitutes for analyzing the Company’s results as reported under GAAP. The Company’s definitions and calculations of these non-GAAP measures are not necessarily comparable to other similarly titled measures used by other companies due to different methods of calculation.

Adjusted EBITDA excludes costs or gains related to restructuring of operations, stock-based compensation, loss on extinguishment of debt and other non-cash and non-recurring costs. Such other non-cash or non-recurring costs include proxy contest expenses and other legal settlements, pre-launch costs to develop the Company’s brand, Keys Soulcare, acquisition-related costs for Well People, third-party costs related to M&A due diligence, costs related to the automation of certain warehouse and distribution activities, and amortization of internal-use software costs related to cloud applications. Adjusted SG&A excludes costs related to stock-based compensation and other non-cash and non-recurring costs. Such other non-cash or non-recurring costs include proxy contest expenses and other legal settlements, pre-launch costs to develop the Company’s brand, Keys Soulcare, acquisition-related costs for Well People, third-party costs related to M&A due diligence, and costs related to the automation of certain warehouse and distribution activities. Adjusted effective tax rate is the tax rate when excluding the pre-tax impact of costs or gains related to restructuring of operations, stock-based compensation, other non-cash and non-recurring costs, amortization of acquired intangible assets, as well as the related tax impact for these items, calculated utilizing the statutory rate for where the impact was incurred. Adjusted net income excludes costs or gains related to restructuring of operations, stock-based compensation, loss on extinguishment of debt, other non-cash and non-recurring costs, amortization of acquired intangible assets and the tax impact of the foregoing adjustments. Such other non-cash or non-recurring costs include proxy contest expenses, pre-launch costs to develop the Company’s brand, Keys Soulcare, acquisition-related costs for Well People, and costs related to the automation of certain warehouse and distribution activities.

With respect to the Company’s expectations under “Fiscal 2023 Outlook” above, the Company is not able to provide a quantitative reconciliation of the adjusted EBITDA, adjusted net income and adjusted diluted earnings per share guidance non-GAAP measures to the corresponding net income and diluted earnings per share GAAP measures without unreasonable efforts. The Company cannot provide meaningful estimates of the non-recurring charges and credits excluded from these non-GAAP measures due to the forward-looking nature of these estimates and their inherent variability and uncertainty. For the same reasons, the Company is unable to address the probable significance of the unavailable information.

Forward-looking Statements

This press release contains forward-looking statements within the meaning of the federal securities laws, including those statements relating to the Company's outlook for fiscal 2023 under “Fiscal 2023 Outlook” above, those statements that the Company continues to execute in a dynamic environment, those statements that the Company believes its competitive advantages and differentiated brand portfolio will continue to fuel its momentum, and those statements that the Company believes it can continue its business momentum into fiscal 2023. Although the Company believes that the expectations reflected in the forward-looking statements are reasonable, actual results and the timing of selected events may differ materially from those expectations. Factors that could cause actual results to differ materially from those in the forward-looking statements include, among other things, the risks and uncertainties that are described in the Company's most recent Annual Report on Form 10-K, as updated from time to time in the Company's SEC filings, as well as the Company’s ability to effectively compete with other beauty companies; the Company’s ability to successfully introduce new products; the Company’s ability to attract new retail customers and/or expand business with its existing retail customers; the Company’s ability to optimize shelf space at its key retail customers; the loss of any of the Company’s key retail customers or if the general business performance of its key retail customers declines; the Company’s ability to effectively manage its SG&A and other expenses; and the uncertainty regarding the impact of the COVID-19 pandemic. Potential investors are urged to consider these factors carefully in evaluating the forward-looking statements. These forward-looking statements speak only as of the date hereof. Except as required by law, the Company assumes no obligation to update or revise these forward-looking statements for any reason, even if new information becomes available in the future.

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