E.l.f. Beauty will implement a new ERP system as part of its growth strategy.
The cosmetics company expects to transition to SAP next year to optimize operations, company leaders shared in an earnings call with investors.
“We’re putting [SAP] in place as we want to make sure that the back of the house is ready for the growth that we have on the road ahead and is able to scale with us,” said Mandy Fields, SVP and CFO, according to a transcript.
The company has built a timeline with a phased approach that includes several testing periods in order to minimize disruption. It expects to implement the ERP in its fiscal 2025; e.l.f. CEO Tarang Amin noted that its current NetSuite platform continues to serve the business well and will enable sequential testing prior to a full implementation.
“We feel really good about the implementation plan … [it’s] a continuation of what’s been a pretty consistent build-out year-after-year,” said Amin.
E.l.f. is also planning to invest in its distribution capacity, including moving to a more distributed model for e-commerce fulfillment and adding capacity to its main warehouse hub in Ontario, CA. The company previously had essentially one automated warehouse to fulfill e-commerce orders, said Amin, and will move to a multi-node distribution network as the first phase of its expansion.
“So far, that has been going well,” he noted. “We are already about the first couple of nodes up and running and feel really good about how that’s going and also seeing an improvement in the time it takes consumers to get their packages.”
The beauty company, which has grown its headcount by 60% over the last four years, Is coming off a strong fiscal year, reporting a 48% increase in net sales, to $578.8 million. It attributed much of the growth to its retail and e-commerce channels, and Amin said they see considerable white spaces in both skincare and international markets.