In July, e.l.f. Beauty was chosen as the best vegan cosmetics company, according to a survey published by Showerstoyou and Ranker.com. This week the company announced results for the three and six months ending September 30, 2019. Net sales increased 6%, or $3.7 million, to $67.6 million as compared to $63.9 million in the three months ended September 30, 2018.
The increase was primarily driven by increased productivity across channels, and product price increases in response to tariffs. This was partially offset by the closing of all 22 e.l.f. retail stores in February 2019. The three months ended September 30, 2018, included $3.2 million in net sales related to its 22 e.l.f. retail stores. Excluding the contribution from e.l.f. retail stores, net sales increased 11% as compared to the three months ended September 30, 2018.
Gross margin increased to 64% from 61% when compared to the three months ended September 30, 2018, with benefits from product price increases, margin accretive innovation, vendor concessions, and favorable movements in foreign exchange rates, partially offset by tariffs on goods imported from China.
According to its balance sheet, the company had $58.7 million in cash and cash equivalents, as compared to $33.6 million as of September 30, 2018. The improvement was primarily due to improved operating results, partially offset by a decrease in other liabilities primarily related to termination payments on store leases, and as of September 30, 2019, long-term debt totaled $132.4 million, as compared to $141.3 million as of September 30, 2018.
“Q2 was another strong quarter with net sales of $68 Million, up 11% excluding e.l.f. stores. We are making significant progress executing against our five strategic imperatives and are pleased with the initial results of our brand recharge,” said Chairman and CEO Tarang Amin. “The increase in our marketing and digital activations, coupled with the impact of our Project Unicorn initiative is driving productivity across channels, including on elfcosmetics.com. Given the continued momentum behind the brand, we are increasing our Fiscal 2020 guidance.”