e.l.f. Beauty's 'Zero-Distance' Strategy — Full Breakdown &

[00:02] interview like this? >> I never imagined it. Never imagined it. >> Yeah, right? It's But this isn't your first Can Lions, right? >> It is not my first. I was last at Can 20 years ago when I was in marketing. So, I

[00:16] years, but and it's changed quite a bit. It's so much bigger than I recall. I It's so much bigger than I recall. I used to come for the ad awards each year and uh uh it's just incredible to see. >> What is the state of e.l.f. beauty?

[00:30] >> Well, you know, e.l.f. beauty is quite healthy. We just reported our 29th consecutive quarter of net sales growth. I think it puts us in one of six public consumer companies out of 546 that's reported 29 consecutive quarters

[00:44] averaging over 20% net sales growth. Uh one of the things I'm particularly proud of is every single brand that we have in our portfolio grew last year and has incredible white space out of it. >> I think of this event, Terrance, and it

[00:58] the the hallmark of this. How does marketing, especially in this age of social media, play into what you do? And how is it How much of that is a of >> No, it's absolutely essential. I mean, our whole ability of engaging our

[01:12] community, giving the best of beauty and making it accessible to every eyelid and face is critical to what we do and how we reach our community is important. There's a reason why we're the number one brand amongst Gen Z, Gen Alpha, and

[01:25] to engage with our consumers. >> How important is that impact of social media? I watch these videos. I mean, you have influencers using makeup in new ways. They create videos and they're they're driving viral

[01:39] moments like really never before. >> Well, for us it's absolutely essential. You know, we have a concept we call zero distance. Zero distance between us and our community. You know, my CMO terrorizes me every once in a while by

[01:51] is an example of >> Wait, you didn't tell me you were doing >> Well, you you don't want to be on it, really. Trust me, because she'll get on the big boss, tell me what you want. And our community's not shy. Last year, the

[02:06] looking at the comments and they're like, oh, Elf, help us out. There's a like, oh, Elf, help us out. There's a prestige brand has these uh uh melting bombs and we want them, but we can't afford them. And I'm like,

[02:19] okay, all right, you want melting bombs and and then the next 20 chats like, no, no, no, boss man, we want them now. And I'll get off that call. I'll be a little bit traumatized. I call my head of R&D and say, all right, community spoken,

[02:32] them in our pipeline. And she says, yes, we do. I'm like, all right, when are they? And she's like, uh 11 months later. I'm like, no, I'm not going to community and we introduce them a few months later.

[02:44] that's really bad. >> one of the biggest products in in our lineup right now and it directly comes with the power of social. Our community lets us know what they want. Our unique ability of taking

[02:58] twist on it and giving it an incredible value. Our melting lip balms are $9 and I think the prestige item is $26. So, it really providing that value and that

[03:10] community really responds when they know like, hey, if we tell Elf something, >> How hard is it to get product to market faster when you have a social media social media community saying, hey Trey, I want this product like yesterday?

[03:24] strengths. We have the best combination of quality, cost and speed in our industry and it's something we've honed particularly over the last 12 years I've particularly over the last 12 years I've been CEO and our ability of being able

[03:36] to engineer in that level of quality, yet provide the same level of value and >> You've you've said that price increases that the that the company took. How have you responded to

[03:50] >> Well, last year in August, we took a dollar price increase in our lineup. It And And frankly, we were forced to. At that time, I think we were facing 170% tariffs.

[04:03] Uh I think last fiscal year, we averaged about 55% tariffs. So, it was something that between tariffs and inflation and the inflationary pressures we had, we were forced to take pricing. Um we did see a drop in units. Now,

[04:15] overall, this pricing was successful. Our our dollars continued to build. But our responsibility of providing superior price discovery, where we're taking certain items and we're taking them down

[04:28] in price and seeing how they respond. Uh we have a skin tint that's an incredible innovation that was priced at $18. We took it down to $14. And in the most recent weeks, we've seen almost an 85% lift in that item. So, it shows the

[04:42] we're here to give it to them. >> Are these across-the-board price cuts? >> No, they're not. They're They're They're really tests to really see which items really respond and what consumers are looking for a better value. And we'll

[04:54] community. And depending on what the community really responds to, we'll take items. >> Are you getting any refunds from >> We are. We are on slate to get about 58.5 million dollars of refunds. Uh

[05:09] refunds yet. I think it's everyone's guess of when we'll get the rest. back." >> don't have visibility. We do know We do believe we'll get the refunds, and we're going to use that refunds to basically

[05:23] >> You know, you uh your products touch really a economically sensitive shopper, even the Target shopper, just trying to make ends meet. When you study are they right now? We've got gas prices, higher cost of living, you name

[05:38] >> You know, certainly the consumers are pressured, but what we found is they're choosing the brands that resonate with them from a value standpoint. And you know, as I said, I'm really happy. Not only is our Elf brand healthy, but you

[05:52] take a look at Naturium, a clinically effective, biocompatible skincare brand more than doubled that business cuz it's the fastest-growing skincare brand on the top 50. Our brand Rhode, which we

[06:05] >> Hailey Bieber's brand, right? >> Hailey Bieber's brand is just off to an incredible start. Uh the most productive brand, actually the number one brand that's a four North American UK carry. I'm really excited

[06:17] be launching Rhode in Europe in uh this fall in 19 countries. Huge opportunity. >> How is that uh the day-to-day operations still involved? And then you mentioned the European launch. Are you going to

[06:30] have a a lot of products under Rhode at some point just like the Elf brand? She's one of the most thoughtful founders I've ever met. She's an incredible uh instinct, uh beautiful aesthetic, and she's involved in every

[06:45] aspect, particularly product, uh and uh she's really made her mark on the brand. We have an incredible team. Nick Vlahos is CEO of that business. The entire team Our acquisition approach is we bring the entire team on board, and

[06:58] we enhance that team with what they need, including resources to expand distribution. And so uh the Sephora launch, I know Sephora is extremely launch, I know Sephora is extremely excited as well in uh come come this uh

[07:10] >> Lastly, what have you learned from Hailey watching how she operates? >> I mean, uh what I've learned is uh there's nothing stopping Hailey about the product line. She is not only meticulous in the product, but just how

[07:23] well curated that line is. She Her philosophy is one of everything really good. So, it's a very tight lineup from an assortment standpoint, but every single item uh like I I I sometimes wonder, can this be true, the numbers

[07:37] that we're getting off that business? But uh it really talks about how it's >> Tyra, good to see you. Thanks for stopping by. Uh let's get some shade. stopping by. Uh let's get some shade. >> Good to see you. I appreciate it.