"e.l.f. grew revenue 14.2% year-over-year to $343.9 million in Q2, but net income collapsed 84.8% to $3 million. The company posted an operating loss of $0.7 million despite a 69.4% gross margin. Selling, general, and administrative expenses hit $231 million, obliterating profitability. Management burned $37.9 million building inventory while operating margins compressed to 2.24% on a trailing basis. CEO Tarang Amin and other executives sold over $24 million in stock during September and October at prices between $130 and $150, weeks before the earnings report sent shares plunging to the $70s."
"Ulta posted $2.9 billion in revenue, beating estimates of $2.7 billion, with comparable sales up 6.3% driven by higher ticket sizes and increased transactions. Net income held flat at $230.9 million, maintaining a 9.93% profit margin. Gross margin expanded to 40.4% from 39.7% a year earlier. CEO Kecia Steelman said results "exceeded our expectations, reflecting the steady progress and momentum our team is building." Operating margin remained stable at 10.8%."
e.l.f. reported a quarterly beat but experienced severe profitability deterioration: revenue rose 14.2% to $343.9 million while net income plunged 84.8% to $3 million and operating margins compressed to roughly 2.24% amid $231 million in SG&A and a $37.9 million inventory build. Significant insider stock sales preceded a sharp share decline. Ulta delivered $2.9 billion in revenue with comparable sales up 6.3%, flat net income of $230.9 million, a near-10% profit margin, expanding gross margin to 40.4%, stable operating margin near 10.8%, and reaffirmed full-year guidance. e.l.f. trades at about 58x earnings with operating margins under 2.5% and a return on equity around 8.77%.
Read at 24/7 Wall St.
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