e.l.f Beauty (ELF)
Cosmetics and Beauty2023 - 2025
ELF's reported DSO of 35 days appears favorable vs. peers at 36.5 days, but adjusted DSO is actually 47.5 days — 30% higher than reported.
Other Findings
- Unsustainable Tax Benefits boosted Net Income by $28M in 2025 (+33%)
- Accounting Policy Change boosted Net Income by $4M in 2025 (+4%)
- Capitalization of Cloud Computing Costs
Analysis
1. Accounts Receivables Analysis
ELF nets its customer returns liability against Accounts Receivable (AR) rather than reporting it as a separate liability, as most peers do. This change in presentation mechanically lowers reported AR and makes DSO appear better than an apples-to-apples comparison would suggest.
| 2023 | 2024 | 2025 | |
|---|---|---|---|
| AR (reported) | 67,928 | 123,797 | 126,010 |
| Plus: Sales Adjustment (liability account) | 23,500 | 38,660 | 45,011 |
| AR (adjusted) | 91,428 | 162,457 | 171,021 |
| DSO (reported) | 42.8d | 44.1d | 35.0d |
| DSO (adjusted) | 57.7d | 57.9d | 47.5d |
In 2025: ELF's reported DSO of 35 days compares with 36.5 days of its peers. Adjusted for returns reserve netting, ELF's DSO is 47.5 days — not only significantly higher than average, but also 30% higher than reported.