e.l.f. Beauty CFO Mandy Fields on 38% sales growth, Rhode acquisition, and Super Bowl ad strategy

customer service. And our first guest of the lightning round is here. Should we bring in Mandy Fields, the CFO of Elf Beauty? Welcome to the show.

What's happening?

Hello. Thanks for having me.

Great to meet you. Uh would love a quick introduction on yourself since it's your first time.

Sure. So, yeah, I'm Mandy Fields. I'm chief financial officer at Elf Beauty. Uh I've been here seven years, my 28th consecutive quarter of reporting the results for Elf Beauty.

Amazing. Amazing. Uh, and what is what's the latest? What's the news?

Well, the news is we just reported another tremendous quarter. 38% net sales growth, 79% has been adjusted EBITDA. Oh, hey. Yeah, I love that. Um, and so we're really having a lot of fun over here at Elf Beauty. Um,

and that's the results.

Uh, what what's driving that

right now? Right now I feel like there's so much uncertainty around the strength of the consumer broadly. There's so many different like indic you can look at government data and see one thing that might give you one signal and then you look at uh report you know uh quarters like you guys are putting up and it says something else but what are you guys seeing?

Yeah well it's really comes down to three things. uh our value proposition and so uh 75% of our portfolio and on the ELF brand is at $10 or less and so that really speaks to that consumer seeking value. Uh you pair that with our incredible innovation uh the marketing engine that we have who by the way I heard that you all are going to be at the big game Super Bowl ads. So congratulations on that. We will be as well.

Um

thank you. I think we'll be at a smaller our buy is will be at a smaller scale than yours. I'm assuming

I saw that. I saw yours was about $50,000,

something like that.

Something like that. Yeah.

But uh yeah. Well, anyways, I want to get into the Super Bowl, too, but uh continue.

So, and then we also have the incredible addition of Road to our net sales performance. And so, Road is an acquisition that we did. We closed in August. That's Haley Bieber's brand. And it has just had tremendous performance. And so, you take all of those things together, that's how you get to that 38% net sales growth for the quarter. How is the marketing mix changing over the last few years? I mean, Meta had blowout quarter. It seems like ads are performing very well on that platform. The influencer economy is still growing. How much uh what does the mix of marketing spend look like?

Yeah, so our marketing spend is pretty well balanced. Uh we we allocate 24 to 26% of our net sales to marketing and digital. Um, and we are there on every platform where our community is present and that has really been a key differentiator with ELF. I think that we are so close to our community. We keep our ear to the ground and so that really comes through in our innovation and the marketing campaigns that we decide to put forward are really culturally relevant and connected to our communities.

Um, and uh, how are you thinking about the agent commerce question? Um, is this something that you need to do anything special for or does it just naturally happen? It's still so early, but it these things in AI, they take off so fast.

I think it is still early. We're making sure that we have the the backend correct so that we can participate in agentic commerce. But, you know, AI is just one of those things where this is kind of one of those technologies that can help on both the revenue side as well as the efficiency side. And so, I think it's pretty incredible from that perspective. Is it possible to build a direct to consumer brand from scratch these days without a huge celebrity partner? Uh we it feels like more and more of the deals that I see that actually go the distance, get to big revenue numbers, they got somebody attached.

Yeah, it's interesting that you say that because um I think that's actually pretty rare for a celebrity brand to make it uh to this side. Like if I think about Haley's brand road, um you know [clears throat] that very rare to see a company go to $200 million in sales in less than three years on 10 products. I mean you usually are seeing multiple products, multiple SKs, categories to get there and so I think what we found in road is pretty rare.

Yeah. Well, congratulations on the progress. Thank you so much. I wanted to before you before you jump off, I I wanted to ask uh kind of what a as CFO how you think about Super Bowl ads. I'm sure this isn't your first rodeo. What kind of goes into it? You know, there there's so much there there's there's so many different ways to approach a Super Bowl ad, but but what's what's kind of your logic going into it or kind of framework?

Yeah. So, Super Bowl ads are really about building awareness behind your brand. And so this is not our first rodeo. Uh I think our first time was four years ago. We came uh with an ad with Jennifer Culage. It was a lot of fun. Uh this year we had Melissa McCarthy as the as the actress in our Super Bowl ad. Um it's fantastic. So I really think it's about building brand awareness. If I think back, you know, five six years, our overall awareness was around 13% as a brand and now we're [clears throat] over 40%. And I credit that to a lot of the collaborations and the things like Super Bowl that we've done over the years.

So, so measurement.

Yeah. So, you're you're CMO and your marketing team are not coming to you and you're saying like cool, I'll give you the budget, but like I want to see a move in topline the next week. It's more about

I always say that I always want to see [laughter]

like show me the money now.

Yeah. Okay.

But in in fact, it is sewing the seeds for a longer term investment. There are other things that we look at that are more direct uh revenue drivers. Um but Super Bowl investments like that are for the long term.

Uh what is last question for me? What's your kind of M&A outlook for the next couple years? I'm sure in a perfect world there'd be a new road every single year that you could roll in, but obviously that's not the way

uh you know great brands don't get you know started every single day or even year sometimes. Uh so how are you thinking about it? Well, we have a great portfolio of brands uh with us today and so that's really going to be our focus on the existing portfolio and building those brands out even further whether it be E.L.F. and cosmetics and skincare, Ntorium or road. We have some really great brands in our portfolio and so that's what we're going to be focused on. If somewhere along the way we found another road be happy to bring it into the portfolio but staying focused on what we have for [clears throat] now

makes a ton of sense.

Awesome. Well, thank you so much for taking the time. Congrats.

Excited to see the ad on Sunday.

Yeah, very excited. We'll talk to you soon. Yeah, congrats on the quarter. Cheers.

Let me talk about Cisco.

It's critical infrastructure for the AI era. Thank you to Cisco for partnering with TVPN.

We had a lot of fun on Monday

at the Cisco AI Summit. Uh truly just just great interviews. If you haven't already gone and seen them, go check them out. Um back to the timeline. Um there is other news as always. Uh, the number of horses per county. [laughter] I didn't see this chart. Um, and Chadson says, "These are rookie numbers. Should be double, even triple this. Horses everywhere. Wall-to-wall horses."

I totally agree.

I am

should be way more horses.

I totally agree. I found out uh uh I'm as you know in the in in escrow on a on a new property and and uh I was talking to somebody very uh enthusiastic about horses and I was getting the breakdown on on what kind of horses I'll be able to support on the property and they were giving me the lay of the land. I hope to

contribute to uh it's going to be on everyone to get these numbers up, right? It's not enough for

totally

one of us.

I mean, Dar Koshari, CEO of Uber, yesterday came on and said that, you know, 75% of all land in cities is parking lots or something. That's not the real number, but uh there's a lot of parking lots. What's going to happen to them when we don't need them because of autonomous cars? Stables. Yep. [laughter] You take your Whimo or your autonomous Uber into the city. You hop on a steed and you go from place to place. Excellent [clears throat] execution, J. Excellent execution. [laughter]