Elf Beauty formalizes its focus on skincare with plans to separate its skincare products from Elf Cosmetics.
Elf Cosmetics originally launched skincare in 2015, and it’s grown to be a “healthy” part of the brand’s sales, said Gayitri Budhraja, brand manager at Elf Beauty. Elf Skin, to be announced Tuesday evening, will include existing products like a cleansing balm, moisturizers and acne products, all selling for $25 or less at current Elf Beauty retail partners. As a standalone brand, Elf Skin will benefit from additional marketing investments, a dedicated space on ElfCosmetics.com, and an increase in skincare social posts. There are no plans for separate social channels, Budhraja said.
“The truth is that Elf Skin got stuck under the color. [E.l.f Skin] It may not be something that consumers perceive, but part of this change is changing our mindsets within the organization,” Budhraja said. “Mindsets about color and skincare are fundamentally different. Color is driven by trend and inspiration, and skincare is driven by efficiency and education.
By carving out Elf Skin, Elf Beauty is able to expand its portfolio with four brands and prepare it for even greater growth. Elf Beauty acquired clean skincare company W3ll People in February 2020. Since then, W3ll People co-founding dermatologist Dr. Renee Snyder has helped clean reformulation and product development across the company. Elf Beauty then launched Keys Soulcare in September 2020 with singer-songwriter Alicia Keys.
“With our acquisition of W3ll People, the launch of Keys Soulcare and the unveiling of Elf Skin, we have built a portfolio of distinct yet complementary brands,” said Tarang Amin, CEO of Elf Beauty, during the fourth quarter and year-end results call in May. “Looking forward, we see the potential to add fast-growing brands to our portfolio, expand our capabilities into adjacent categories or different consumer segments, while leveraging our multiple advantages.”
Such expansion would stem from the success of the long-term turnaround strategy begun in 2019 to improve sales and business growth. Key strategies included closing its stand-alone stores and increasing focus on mass retail distribution. Since then, Elf Cosmetics has bucked the industry trend of declining cosmetics sales with 13 consecutive quarters of net sales growth. For fiscal 2022, its net sales increased 23% year-over-year to $392 million, and the company expects its net sales to increase 10-12% in fiscal 2023 .
Starting in late June, Elf Skin will launch its first dedicated digital campaign to educate existing customers about its offerings, as well as drive new consumer acquisitions.
“[Skin care] is not a compromise. We don’t take our eyes off what we’re doing color-wise,” Budhraja said.