e.l.f. Beauty Announces $500 Million Share Repurchase Program

Rhea-AI Summary

e.l.f. Beauty (NYSE: ELF) has announced a new $500 million share repurchase program, authorized by its Board of Directors. This follows the exhaustion of its previous $25 million program from 2019, with approximately $17 million used in the past two weeks. The company's CEO, Tarang Amin, expressed confidence in their strategy and long-term potential, citing consistent category-leading sales and market share growth.

CFO Mandy Fields highlighted the company's strong cash flow generation and emphasized that their cash priorities remain focused on investing in growth initiatives and strategic extensions. The new program allows for repurchases through various methods, including open market purchases and accelerated share repurchase transactions, with timing and amount based on market conditions and other factors. The program has no expiration date and can be modified or terminated at any time.

Positive

• Authorization of a substantial $500 million share repurchase program
• Strong cash flow generation allowing for significant share buybacks
• Consistent category-leading sales and market share growth
• Confidence in long-term potential and growth strategy
• Flexibility in repurchase methods and timing

Negative

• Potential reduction in cash available for other investments or acquisitions
• No guarantee of share price appreciation despite buyback program

Insights

Financial Analyst

e.l.f. Beauty's announcement of a $500 million share repurchase program is a significant financial move. This substantial increase from their previous $25 million program signals strong confidence in the company's future. Share buybacks can be seen as a positive indicator for investors, as they typically lead to increased earnings per share and can potentially boost stock prices. However, it's important to note that this large allocation towards share repurchases might limit funds available for other growth initiatives or acquisitions. The company's emphasis on strong cash flow generation is encouraging, but investors should closely monitor how this program impacts e.l.f.'s financial flexibility and growth strategies in the long term.

Market Research Analyst

e.l.f. Beauty's aggressive share repurchase program reflects the company's robust market position in the cosmetics industry. With reported category-leading sales and market share growth, e.l.f. appears to be outperforming competitors. The mention of expansion opportunities in cosmetics, skincare and international markets suggests untapped potential for further growth. This move could be seen as a strategic response to the current market dynamics, where beauty brands are fiercely competing for market share. Investors should keep an eye on e.l.f.'s ability to maintain its growth trajectory while balancing this significant financial commitment, especially in light of potential economic uncertainties and changing consumer behaviors in the beauty sector.

Corporate Strategy Expert

The $500 million share repurchase program represents a bold strategic move by e.l.f. Beauty. This decision indicates management's strong belief in the company's intrinsic value and future prospects. It's a clear signal to the market that they view their stock as undervalued. However, this strategy also raises questions about the company's growth priorities. While they mention investing in growth initiatives and strategic extensions, allocating such a large sum to buybacks could potentially limit resources for R&D, marketing, or acquisitions. Investors should carefully assess whether this capital allocation strategy aligns with e.l.f.'s long-term growth objectives and industry trends, particularly as the beauty market continues to evolve rapidly.

OAKLAND, Calif.--(BUSINESS WIRE)-- e.l.f. Beauty (NYSE: ELF) today announced the Company’s Board of Directors authorized a share repurchase program of up to $500 million of the Company’s common stock. The Company’s previous $25 million program, authorized in 2019, has been exhausted following the Company’s use of approximately $17 million in cash to repurchase shares over the past two weeks.

“This share repurchase authorization reflects confidence in our strategy and the long-term potential we see for e.l.f. Beauty,” said Tarang Amin, e.l.f. Beauty’s Chairman and Chief Executive Officer. “We have a track record of delivering consistent, category-leading sales and market share growth and are excited about the whitespace we see for e.l.f. Beauty across cosmetics, skin care and international.”

“Today’s announcement illustrates the strong cash flow generation of our business and enhances our capital allocation optionality,” said Mandy Fields, e.l.f. Beauty’s Chief Financial Officer. “We expect our cash priorities to remain focused on investing in our growth initiatives and supporting our strategic extensions. Our new repurchase authorization provides another avenue for us to continue to drive long-term value creation for our shareholders.”

The new share repurchase program authorizes the repurchase of up to $500 million of the Company’s outstanding common stock. Purchases under the new share repurchase program may be made from time to time, in such amounts as management deems appropriate, through a variety of methods, which may include open market purchases, privately negotiated transactions, block trades, accelerated share repurchase transactions, purchases through 10b5-1 trading plans, or by any combination of such methods. The timing and amount of any repurchases pursuant to the new share repurchase program will be determined based on market conditions, share price and other factors. The new share repurchase program does not have an expiration date, does not require the Company to repurchase any specific number of shares of its common stock, and may be modified, suspended or terminated at any time without notice.

About e.l.f. Beauty

e.l.f. Beauty (NYSE: ELF) is fueled by a vision to be a different kind of company that disrupts norms, shapes culture and connects communities through positivity, inclusivity and accessibility. Our mission is to make the best of beauty accessible to every eye, lip, face and skin concern, through our brands e.l.f. Cosmetics, e.l.f. SKIN, Keys Soulcare, Well People and Naturium. We are committed to our superpowers of delivering premium-quality products at accessible prices with universal appeal that are clean, vegan, cruelty free and Fair Trade certified.

Learn more at https://www.elfbeauty.com/.

Forward-Looking Statements

This press release contains forward-looking statements within the meaning of the federal securities laws. All statements, other than statements of historical facts, included in this press release that address activities, events or developments that we expect, believe or anticipate will or may occur in the future, are forward-looking statements. 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 filings with the Securities and Exchange Commission. 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.

View source version on businesswire.com: https://www.businesswire.com/news/home/20240827555515/en/

Investor Relations Contacts:

Investors:

KC Katten

kkatten@elfbeauty.com

Media:

Sam Critchell

scritchell@elfbeauty.com

Source: e.l.f. Beauty

FAQ

What is the size of e.l.f. Beauty's new share repurchase program?

e.l.f. Beauty (ELF) has authorized a new share repurchase program of up to $500 million of the company's common stock.

Why did e.l.f. Beauty announce a new share repurchase program?

The company announced the program to reflect confidence in its strategy, long-term potential, and to drive long-term value creation for shareholders. It also demonstrates the strong cash flow generation of the business.

How much did e.l.f. Beauty spend on share repurchases in the past two weeks?

e.l.f. Beauty used approximately $17 million in cash to repurchase shares over the past two weeks, exhausting its previous $25 million program authorized in 2019.

Does the new e.l.f. Beauty share repurchase program have an expiration date?

No, the new share repurchase program does not have an expiration date and can be modified, suspended, or terminated at any time without notice.

How will e.l.f. Beauty implement its new share repurchase program?

e.l.f. Beauty may repurchase shares through various methods, including open market purchases, privately negotiated transactions, block trades, and accelerated share repurchase transactions, based on market conditions and other factors.