{ "docId": "019dd923-622c-750b-8b97-a1171d7d86a0", "docSlug": "71e665b79a9a", "documentTitle": "e.l.f. Beauty, Inc. (ELF)", "authorId": "51_Muddy_Waters", "authorName": "Muddy Waters Research", "documentKindSlug": "research-note", "documentKindLabel": "Research note", "sourceTypeSlug": "short_seller", "sourceTypeLabel": "Short seller", "presentationDate": "2024-11-20 00:00:00", "orientation": "landscape", "aspectRatio": 1.7777778, "pageNumber": 47, "pageCount": 48, "prevPage": 46, "nextPage": 48, "slideType": "expose_contradiction", "function": "expose_contradiction", "density": "dense", "nDataPoints": 8, "notes": "The slide uses a quote from the CFO and an excerpt from the 10-Q to analyze inventory growth drivers.", "elementsJson": [ "headline_text", "bullet_list", "paragraph", "quote_block", "footnote" ], "metadataConfidence": 0.95, "imagePath": null, "slideHref": "/slides/019dd923-622c-750b-8b97-a1171d7d86a0/47", "deckHref": "/decks/019dd923-622c-750b-8b97-a1171d7d86a0", "deckJsonHref": "/decks/019dd923-622c-750b-8b97-a1171d7d86a0.json", "deckAnchorHref": "/decks/019dd923-622c-750b-8b97-a1171d7d86a0#slide-47", "components": [ { "bbox": null, "kind": "callout", "text": "The increase in net working capital was primarily driven by a $93.9 million increase in inventory.", "attrs": null, "subkind": null, "toolName": "Visual emphasis", "toolSlug": "visual-emphasis", "confidence": null, "componentId": "019dd953-0f1b-7682-849f-257ccf072a41", "frameworkName": null, "frameworkSlug": null }, { "bbox": { "h": 0.08, "w": 0.83, "x": 0.027, "y": 0.19 }, "kind": "list", "text": "$7.8 million of Elf product inventory is in-transit (i.e. ‘on the water’).1\nThe Naturium acquisition added $26 million (total) to the company’s total inventory.", "attrs": null, "subkind": "bullet", "toolName": null, "toolSlug": null, "confidence": null, "componentId": "e92dbbef-f42a-4ff5-b36d-9339e43347fc", "frameworkName": null, "frameworkSlug": null }, { "bbox": { "h": 0.25, "w": 0.79, "x": 0.15, "y": 0.31 }, "kind": "paragraph", "text": "Cash provided by operating activities\nFor the fiscal year ended March 31, 2024, net cash provided by operating activities was $71.2 million. This included net income, before deducting depreciation, amortization and other non-cash items of $205.5 million, partially offset by an increase in net working capital of $123.8 million and payment of acquisition-related seller expenses of $10.5 million in connection with the Acquisition. The increase in net working capital was primarily driven by a $93.9 million increase in inventory. The increase was reflective of building inventory to support net sales growth, as well as $10.0 million related to Naturium inventory, and $7.8 million related to a change in certain vendor arrangements where we now take ownership of inventory at shipment from China versus when it enters our U.S. distribution center. Additional changes in working capital include a $49.6 million increase in accounts receivable, a $55.2 million increase in prepaid and other assets, and a $6.3 million decrease in other liabilities, partially offset by an $81.2 million increase of accounts payable and accrued expenses.", "attrs": null, "subkind": "paragraph", "toolName": null, "toolSlug": null, "confidence": null, "componentId": "a37d676d-34d2-42b6-84f1-9ccdb688d63a", "frameworkName": null, "frameworkSlug": null }, { "bbox": { "h": 0.22, "w": 0.95, "x": 0.027, "y": 0.64 }, "kind": "quote", "text": "“Our ending inventory balance was $191 million, in line with our expectations and up from $81 million a year ago. The difference is primarily a combination of 3 things: first, as we've said the past few quarters, we continue to build back our inventory levels to support strong consumer demand. Second, our consolidated results now include Naturium, which added approximately $26 million of inventory; lastly, an additional $8 million of the increase is the result of taking ownership of inventory from China when it ships versus when it enters our distribution center here in the U.S.” - Mandy Fields, ELF CFO", "attrs": null, "subkind": "pull-quote", "toolName": null, "toolSlug": null, "confidence": null, "componentId": "8e3be6cc-58b7-49f9-833e-5cd6e585c64d", "frameworkName": null, "frameworkSlug": null }, { "bbox": null, "kind": "quote", "text": "\"Our ending inventory balance was $191 million, in line with our expectations and up from $81 million a year ago. The difference is primarily a combination of 3 things: first, as we've said the past few quarters, we continue to build back our inventory levels to support strong consumer demand. Second, our consolidated results now include Naturium, which added approximately $26 million of inventory; lastly, an additional $8 million of the increase is the result of taking ownership of inventory from China when it ships versus when it enters our distribution center here in the U.S.\" — Mandy Fields, ELF CFO", "attrs": null, "subkind": null, "toolName": "Authority citation", "toolSlug": "authority-citation", "confidence": null, "componentId": "019dd953-0f1b-7682-849f-2883698b46c7", "frameworkName": null, "frameworkSlug": null }, { "bbox": { "h": 0.02, "w": 0.2, "x": 0.027, "y": 0.88 }, "kind": "source-note", "text": "1 ELF Beauty, FY2024, 10-K, p. 50", "attrs": null, "subkind": null, "toolName": null, "toolSlug": null, "confidence": null, "componentId": "35ac73e5-1395-4d4c-bdf9-ea05da16ffd6", "frameworkName": null, "frameworkSlug": null }, { "bbox": { "h": 0.04, "w": 0.43, "x": 0.027, "y": 0.085 }, "kind": "title", "text": "Q4 FY2024 10-Q and Earnings Call:", "attrs": null, "subkind": "headline", "toolName": null, "toolSlug": null, "confidence": null, "componentId": "a151c0ba-ac1e-46ea-bcf8-996392dd9088", "frameworkName": null, "frameworkSlug": null } ], "metrics": [], "tools": [], "frameworks": [], "arcBeats": [], "loops": [], "imagePathAlt": null, "thumbSrc": null, "thumbSrcAlt": null, "locked": true }