US-based beauty company e.l.f. Beauty reaffirmed its fiscal 2020 guidance, which it issued on February 5.
The guidance predicts a 7% to 8% net sales increase year-over-year, excluding the contribution of its retail stores, with net sales between $274m and $277m. Adjusted EBITDA is expected to come in at between $58m and $60m.
The company says its China operations are returning to normal while its US distribution centers are currently fulfilling national retailer and e-commerce orders. e.l.f.’s inventory position is sufficient to supply Walmart, Target, other retailers and online orders, the company said.
Despite reaffirming its guidance, the company reported a significant decline in retail sales over the past two weeks due to the COVID-19 pandemic. e.l.f. expects its sales and Nielsen tracked channel results to be negatively impacted until consumers return to normal shopping habits.
e.l.f. is focusing on the company’s relative performance to the category and the opportunity to build market share.
The company says it has a strong liquidity position, with some $45m in cash on hand and access to a $50m revolving credit facility. e.l.f. will also reduce working capital, better match marketing expenses to demand and explore other areas to reduce operational costs.
e.l.f. Beauty chairman and ceo Tarang Amin said: “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 spend. We remain confident in our long-term growth potential given our proposition of delivering prestige quality cosmetics and skin care at an extraordinary value.”