While boosting its marketing spend in 2023, e.l.f. Beauty (ELF) saw net sales growth while swallowing up more market share in the beauty and cosmetics space. e.l.f CEO Tarang Amin joins Yahoo Finance Live to discuss the brand's growth outlook in the category and how integral social media, including TikTok, has been for reaching younger consumers.

"The next evolution of growth is continuing to execute our strategy, which we feel confident we can again double our market share in color cosmetics nationally. We feel skin care is an even bigger opportunity with e.l.f. Skin and Naturium," Amin says. "And... international represents 14% of our sales where a lot of our global competitors have over 70% of their sales. We're seeing really great resonance of the brand overseas..."

For more expert insight and the latest market action, click here to watch this full episode of Yahoo Finance Live.

Editor's note: This article was written by Luke Carberry Mogan.

Video Transcript

[AUDIO LOGO]

AKIKO FUJITA: Well, shares of cosmetics company e.l.f. have skyrocketed in recent years up more than 2,000% over the last five years. This comes as the company has significantly boosted its marketing spend citing the strong return on investment.

And if you're on Instagram or TikTok, it is hard to go a day without seeing an e.l.f. Ad. Joining us now is Tarang Amin e.l.f. Beauty CEO. It's good to talk to you today on the floor of the New York Stock Exchange. This is a company that has seen some incredible momentum. Raising your guidance three times in a row, how much of that momentum has carried through in this current quarter? And I'm curious what you're seeing in consumer habits right now?

TARANG AMIN: Well, first of all, thank you for having me. We're really proud of our exceptional consistent category leading growth. Our last quarter, third quarter, we were up 85% in net sales. That was our 20th consecutive quarter of growth averaging at least 20% growth. And I'd say there's really three drivers of that, our exceptional value proposition, powerhouse innovation, and marketing engine. And all three are working together, and it's really helping from a consumer standpoint.

RACHELLE AKUFFO: And Tarang, as you mentioned, trading there at the NYSE for 20 years, what do you think was the turning point though, especially in the last five years that's really seen the stock price skyrocket?

TARANG AMIN: Well, I think the consistency of our growth is what I believe investors are rewarding us for. The level of growth we've been able to achieve we've almost doubled our market share in just the last few years. But I think the more important thing is just how much white space we have ahead of us.

We're the number three brand now in color cosmetics nationally, but at our longest standing national retail customer at Target, we're their number one brand with almost a 23% share. Almost double where we are-- more than double where we are nationally.

In skincare, we have two incredible brands with e.l.f. Skin and Naturium to be able to pursue those aspirations. And internationally, in very many ways we're just getting started with exceptional growth internationally as well. So I think it's that combination of consistent growth over the last five years combined with so much white space still ahead of us.

AKIKO FUJITA: As we said in the intro to you, this is a brand that's been able to get a lot of traction with younger buyers, particularly, with your ad spends campaigns on social media. We've been talking a lot about TikTok. Obviously, I'm not going to ask you to weigh in on what exactly DC is going to do. But I'm curious as you look across the platforms what does TikTok offer to a brand like e.l.f. In terms of exposure and getting to the customer that you want that other social media platforms do not?

TARANG AMIN: Well, I think, first of all, we live where our community lives. So our strength, the reason why we are a pioneer on TikTok, have our own channel on Twitch, actually, have the number one branded experience right now in Roblox is you look at what is engaging our community and what entertains them. And we go there.

And so it's very native to each platform and authentic. And so I'd say one of the things TikTok brings to the marketplace is the ability of consumers to weigh in themselves. They're no longer necessarily dependent on influencers or their celebrities to tell them.

When we introduce something new, for example, our $8 lip oils which compare to a prestige item at $40, we get thousands of TikTok videos almost immediately in terms of consumers making the comparison. So I'd say that's one of the things TikTok brings. But on the other hand, because we're so broad in our presence on different social media platforms, we'll continue to live where our consumers live. So if something ever happened to TikTok, we'll follow our consumers where do they go next. And I think that's really the strength of our platform.

RACHELLE AKUFFO: And Tarang, and I certainly can't step into Target without my 10-year-old trying to steer me towards the e.l.f. brand cosmetics over there, the skincare. What does the next level of growth look like in terms of partnerships that you're looking at or really tapping into the next evolution of growth for e.l.f.?

TARANG AMIN: Well, I think the next evolution of growth is continuing to execute our strategy, which we feel confident we can again double our market share in color cosmetics nationally. We feel skincare is an even bigger opportunity with e.l.f. Skin and Naturium. And internationally represents 14% of our sales where a lot of our global competitors have over 70% of their sales.

And we're seeing really great resonance of the brand overseas where there's almost already pent-up demand from a consumer standpoint well before we go into our market. So I think that's one of the most exciting things for me. The company is 20 years old. I've been CEO for 10 years. Every time I get a new candidate, I tell them you're joining us exactly the right moment because we're just getting started, and I absolutely believe that.

AKIKO FUJITA: You mentioned international is a potential opportunity. What are some markets that you see significant upside for growth? Well, our primary international business right now is really off of two countries, Canada and the UK.

The first two countries we went into we continue to build share, continue to build our ranking. But one of the exciting things for me is just a few months ago, we launched a brand with Douglas in Italy and quickly became their number one brand not only in the mass side but on their prestige side.

And again, it speaks to that phenomenon of a lot of our social feed is actually consumed outside the US, so there's already pent-up demand. So I'd say all of Western Europe. We have a good business with Nykaa, an online beauty retailer in India. Really as we see opportunities across the world, but we'll have this focused, disciplined expansion strategy, which I have a lot of confidence in.

RACHELLE AKUFFO: And Tarang, even within the ranks of e.l.f, one of the pillars that you mentioned there in your notes is purpose. Talk about why that's important, especially as you see some companies really not prioritizing that. But you see a lot of consumers wondering, who it is I'm buying from? Why did you decide to prioritize that?

TARANG AMIN: Well, we prioritize it because it's important to our community. It's important to our employees. You know, we're one of the first mass brands that not only offered premium quality at these accessible price points with broad appeal, but we were one of the first ones that was clean, vegan, cruelty-free, and the only beauty company that's fair trade certified.

And the reason why we've done all those things is that's what our community values. And so it's really important for us as our purpose if we stand with every eye, lip, face, and paw is we really want to make sure that we're enabling people to express themselves, for people to empower and embody our ethics. And it's working. It definitely resonates with our community, and they, in turn, reward us in terms of not only the products they buy but the company that they love.

RACHELLE AKUFFO: Certainly appears to be working. Appreciate you taking the time to join us this morning. Tarang Amin, e.l.f. Beauty CEO. Thank you for your time today.

TARANG AMIN: Thank you.