Thank you for joining us today to discuss e.l.f. Beauty's second quarter fiscal '25 results. I'm KC Katten, Vice President of Corporate Development and Investor Relations. With me today are Tarang Amin, Chairman and Chief Executive Officer, and Mandy Fields, Senior Vice President and Chief Financial Officer. We encourage you to tune into our webcast presentation for the best viewing experience, which you can access on our website at investor.elfbeauty.com. Since many of our remarks today contain forward-looking statements, please refer to our earnings release and reports filed with the SEC, where you'll find factors that could cause actual results to differ materially from these forward-looking statements. In addition, the company's presentation today includes information presented on a non-GAAP basis. Our earnings release contains reconciliations of the differences between the non-GAAP presentation and the most directly comparable GAAP measure. With that, let me turn the webcast over to Tarang. Thank you, KC, and good afternoon, everyone. Today we'll discuss the drivers of our second quarter results and our raised outlook for fiscal 2025. I want to start by recognizing the e.l.f. Beauty team. Q2 marked yet another quarter of consistent category-leading growth. In Q2, we grew net sales 40%, delivered $69 million in Adjusted EBITDA, and increased our U.S. market share by 195 basis points. Q2 marked our 23rd consecutive quarter of both net sales growth and market share gains, putting e.l.f. Beauty in a rarefied group of high-growth companies. We are one of only six public consumer companies out of 546 that has grown for 23 straight quarters and averaged at least 20% sales growth per quarter. e.l.f. is the only brand of the nearly 1,000 cosmetics brands tracked by Nielsen to gain share for 23 consecutive quarters. Our net sales growth of 40% in Q2 came in above our outlook, with stronger-than-expected growth across international retailers and digital commerce helping to offset U.S. tracked channel trends that were slightly below our expectations. Our international net sales grew 91% in Q2, fueled by growth in our existing markets as well as expansion into new markets. International drove 21% of our net sales in Q2, up from 16% a year ago. We continue to see significant runway for growth in our largest existing markets. e.l.f. outpaced category growth by more than 20 times in Canada and more than 7 times in the U.K., fueling share gains in each. As we look to new international markets, we've seen success with our engagement model across social platforms, driving consumer demand well before we enter a country. We saw this play out in Q2 with the launch of e.l.f. in 1,600 Rossmann stores in Germany, our biggest international launch to date. e.l.f. quickly ascended to Rossmann's number one cosmetics brand in the stores we entered. Our expansion in Rossmann continues into November. We're also pleased to maintain our number one brand rankings since the launch in both Etos in the Netherlands and Douglas in Italy. Turning to digital, Q2 digital consumption trends were up nearly 40% year over year, on top of more than 75% growth in Q2 of last year. Digital channels drove 20% of our consumption in Q2 as compared to 17% a year ago. The momentum we're seeing is supported by enhancements to our loyalty program within our app and on our digital and social platforms. Our Beauty Squad loyalty program now has 5.3 million members, with enrollment consistently growing about 30% year over year. Our Beauty Squad loyalists are a key part of our digital ecosystem, with higher average order values, higher purchase frequency, stronger retention rates, and our rich source of first-party data. We're continuing to fuel new member enrollments with exclusive early access to new product launches and unique integrations with our digital partners. Turning to the U.S., looking at Nielsen tracked channel trends, which represent about half our business, our consumption trends in Q2 were softer than expected, coming in at +16% versus our +20% expectation. We attribute this to two factors. First, we've seen a larger-than-expected moderation in the overall color cosmetics category trends to -5% in Q2 as compared to -1% in Q1. We believe consumers are being more choiceful with their spending. It's evident in our significant outperformance and market share gains that those more choiceful consumers are choosing e.l.f. In Q2, we gained 195 basis points of market share, on top of 330 basis points in Q2 last year. For context, e.l.f. is the number one U.S. color cosmetics brand in unit share, number two brand in dollar share, and is driving the category as the fastest-growing brand in both units and dollars among the top 20 brands across both mass and prestige. Secondly, from a product perspective, we're cycling significant strength in our Halo Glow, and Power Grip franchises last year that was driven by product newness and substantial marketing support. This fall, we didn't have the same level of franchise support. Looking ahead, we see an opportunity to better balance reanimating our core franchises and supporting our innovation. At the same time, we're pleased that our 2024 innovation is exceptional. e.l.f. holds six of the top 10 new product launches this year in mass cosmetics and holds three of the top 10 SKUs across both mass and prestige. Looking ahead, we remain confident in our ability to continue to gain share and deliver category-driving growth, as reflected in our raised FY25 guidance at 28%-30% net sales growth. I'd like to put the strength of our results in the context of the broader beauty industry. While beauty has comparatively low barriers to entry, very few brands have been able to scale. Of the over 1,900 cosmetics and skincare brands tracked by Nielsen, few have surpassed $25 million in annual retail sales. Even fewer have surpassed $100 million. And e.l.f. Cosmetics is one of only four brands to achieve over $850 million in retail sales. e.l.f. has been one of the few brands able to scale through our five unique areas of advantage that form our competitive moat. Let me take a moment to walk you through each. Our first area of advantage is our passionate team of owners and high-performance team culture. We grant equity to every employee every year. This aligns our employees' interests with that of our shareholders and provides wealth creation opportunities across the entire team. Excluding our executive officers, we've granted more than $180 million in equity in a stock that's gone up more than sixfold. Our unique compensation model and high-performance team culture has led to exceptionally high employee engagement of 90%, 18 points above the consumer industry benchmark. And 97% of our employees recommend e.l.f. as a great place to work. This high level of engagement fuels our ability to move at e.l.f. speed. I'm proud that we continue to lead with purpose as we strive to create a different kind of beauty company, one that is purpose-led and results-driven. Our third annual impact report, launched in October, demonstrates how these go hand in hand. It shows how acting with purpose to further our positive impact drives more successful business outcomes. We are now the only U.S. publicly traded company out of approximately 4,100, with a board of directors at 78% women and 44% diverse. With our Change the Board Game initiative, we aim to champion diversifying boardroom representation with a goal to double the annual growth rate of women and diverse candidates added to corporate boards. Our second area of advantage is our value proposition. Our mission is to make the best of beauty accessible to every eye, lip, and face. The average price point for e.l.f. is about $6.50 today, as compared to nearly $9.50 for legacy mass cosmetics brands and over $20 for prestige brands. Switching to just four of e.l.f.'s holy grails from prestige brands can save consumers over $120. Importantly, with e.l.f., our consumers don't have to compromise. We continue to hear from consumers that we deliver quality that's often better than prestige. Our value proposition is evidenced in our strong unit growth. e.l.f. was again the only top five cosmetics brand to grow units in Q2. We complement our accessible price points with a retail distribution strategy to offer e.l.f. wherever consumers shop for beauty. To that end, we're pleased to announce we'll be expanding e.l.f. to a subset of Dollar General stores in November. Dollar General has a stated strategy of serving the underserved, with 80% of its stores serving markets of 20,000 people or less. With this launch, we hold true to our mission to democratize access for consumers who otherwise wouldn't have the best of beauty, particularly in rural areas which have traditionally been served by only the major legacy brands. Our third area of advantage is our powerhouse innovation. We have a unique ability to deliver a steady stream of holy grails, taking inspiration from our community and the best products in prestige, adding our e.l.f. twist, and bringing them to market at an extraordinary value. Our holy grail innovation approach has built category leadership over time. Nationally, e.l.f. is the number two mass brand on a dollar basis, with approximately 12% share, more than double the level we had three years ago. Our innovation is working and driving further share gains in some of the largest and leading segments. In face makeup, for example, our largest segment, we now hold 22% share, maintaining our number one rank and gaining 180 basis points of share in Q2. Our innovation is also driving share gains in some of the industry's top segments where we under-index in share. Our focused innovation drove 700 basis points of share gains in lip and 170 basis points of share gains in eye. Today, we have a 10% share and number four ranking in lip and an 8% share and number four ranking in eye. We have significant white space in these large segments and the innovation engine to conquest them. Our fourth area of advantage is our disruptive marketing engine. We believe our marketing engine is best in class in creating culturally relevant output, finding unique ways to entertain and engage our community through disruptive brand partnerships, sports, music, and movies. Skincare continues to be a key white space area for us. Studies show that Gen Z uses more skincare than any other generation. With the acquisition of Naturium last October, we now have two of the fastest-growing mass skincare brands that are complementary in their price points, positioning, and audiences. In Q2, we launched our biggest e.l.f. Skin awareness campaign to date, Divine Skin Intervention. Fueled by insights, we transformed our community's real-life skincare confessions into a 360-degree campaign across social media, television, and out of home. Hey, just sleep in your makeup. You're so tired. Sorry, I'm here. I should have asked. Who are you? I'm this influencer girly. Duh, the splotch queen, the Duchess of Dirt, the Princess of Dryness. I'm the one that tempts you to commit skin sins like washing with whatever. Yes, that's it, you dirty guy that likes the dirty soap. Or overpaying for trendy products. This is so much better than paying your rent. And the girlies swear by it. So sleep in your makeup. Silky smooth skin is stupid. e.l.f. Skin, no. So easy, so effective, so affordable. Why? Don't be tempted by skin sins. Holy Hydration!, your skin salvation. In Q2, we push further into entertainment with the release of Get Ready With Music, the album, featuring 13 original songs by emerging global artists, highlighting the synergies between music and makeup. The album puts the e.l.f. twist on the Get Ready With Me beauty videos, which are in heavy rotation among our social communities. The first single, Hairpin, became the number one video ever on e.l.f.'s YouTube channel with more than 10 million views. We have a unique ability to combine the best of beauty, culture, and entertainment to attract and engage generations of consumers across a variety of platforms. e.l.f. remains a Gen Z favorite. In Piper Sandler’s latest Taking Stock with Teens survey, e.l.f. Cosmetics ranked the number one teen brand for the sixth consecutive season. We grew our mind share by six points versus last year, with our 35% mind share now three and a half times the level of the number two brand. We're also growing our audience beyond Gen Z. Recent surveys show e.l.f. Cosmetics ranks number one in purchases amongst millennials and Gen Alpha. Our marketing is working, delivering ROIs multiples above benchmarks and expanding our unaided brand awareness from 13% in 2020 to 33% in 2024. I've been in the consumer space over 30 years and have never seen a 20-point jump in unaided awareness in just a few years. As great as that is, the leading U.S. mass cosmetics brand has 55% unaided awareness, giving us confidence in our runway for growth. Our fifth area of advantage is our productivity model. Founded as a digitally native brand, e.l.f. remains the only top five mass cosmetics brand with our own direct-to-consumer site. We leverage insights from our site and Beauty Squad loyalty program to proactively change out up to 20% of our retail assortment each year. This approach has led us to be the most productive brand on a dollar-per-foot basis with our largest retail customers globally. In addition to driving strong productivity, we are benefiting our global retail partners and the beauty industry at large by driving more traffic, stronger category growth, and greater penetration among younger consumers. Our productivity and growth has earned us more space with our global retail partners. In the U.S., we're pleased to announce e.l.f. will be gaining space in Target and Walgreens in spring 2025, adding to the space gains we've previously announced this year. Internationally, we continue to grow our footprint in existing markets like the U.K. and Canada. We're also in the early innings of our multi-year new market expansion strategy. As I discussed earlier, in Q2, we executed our biggest international launch to date, bringing e.l.f. to 1,600 Rossmann stores in Germany and are pleased by the exceptional consumer demand we're seeing. As previously announced, we launched e.l.f. in Sephora Mexico in October, marking the e.l.f. brand's first partnership with Sephora. While we're still in the early days, we're pleased that we're already the number one cosmetics brand in Sephora, Mexico. In summary, we have five areas of advantage that have enabled us to deliver consistent category-leading growth and market share gains. As we look ahead, we remain confident in our ability to continue driving market share gains in color cosmetics and skincare, both domestically and internationally, in the near and long term. I'll now turn the call over to Mandy. Thank you, Tarang. I'll now cover the highlights of our second quarter results as well as our raised outlook for Fiscal 2025. Q2 net sales grew 40% year over year on top of 76% growth in Q2 of last year, fueled by growth across international retailers, digital commerce, and our national retailers. I'm pleased that our sales growth has been underpinned by continued category outperformance and market share gains in the U.S., as well as planned diversification outside of the U.S. Our net sales growth continues to be led by higher unit volume, which contributed approximately 29 points to growth, with mix adding approximately 11 points. Q2 gross margin of 71% was up approximately 40 basis points compared to prior year. We saw gross margin benefits from cost savings, favorable foreign exchange impacts, and price increases in our international markets. This was partially offset by mix related to Naturium further penetrating the wholesale channel and higher transportation costs. On an adjusted basis, SG&A as a percentage of sales was 53% in Q2 compared to 45% last year. The year-over-year increase was partially driven by a planned step-up in marketing and digital investment. Marketing and digital investment for the quarter was 24% of net sales as compared to 21% last year. The remaining increase in adjusted SG&A was driven primarily by the inclusion of Naturium in our consolidated financials, given we acquired the business in October of last year, as well as ongoing investments in our team and infrastructure. Q2 adjusted EBITDA was $69 million, up 15% versus last year, and adjusted EBITDA margin was 23% of net sales. Adjusted EBITDA came in better than we expected for the quarter, in part due to a timing shift of expenses out of Q2 and into Q3. Even with that shift, we continue to expect adjusted EBITDA growth to be stronger in the second half of fiscal 2025 as we cycle the inclusion of Naturium in our financials and see more normalized rates of marketing investment year over year. Moving to the balance sheet and cash flow. Our balance sheet remains strong, and we believe positions us well to execute our long-term growth plans. We ended the quarter with $97 million in cash on hand compared to a cash balance of $108 million at the end of fiscal 2024. Our ending inventory balance was $239 million, in line with our expectations and up from $147 million a year ago. Consistent with the last few quarters, the increase was driven by timing of when we take ownership of inventory from China, the addition of Naturium, and supporting the demand we're seeing. Our liquidity position remains strong. We ended the quarter with less than one times leverage in terms of net debt to adjusted EBITDA. We expect our cash priorities for the year to remain on investing behind our growth initiatives and supporting strategic extensions. The specific growth initiatives we're focused on this year include investing in our people and infrastructure, our ERP transition to SAP, as well as increased distribution capacity to support strong global consumer demand. Additionally, we recently announced the authorization of a new $500 million share repurchase program, which provides another avenue for us to continue to drive long-term value creation for our shareholders. Now let's turn to our raised outlook for Fiscal 2025. We are pleased to be in a position to raise our outlook across both the top and bottom line. For the full year, we now expect net sales growth of approximately 28%-30%, up from 25%-27% previously. Our raised outlook reflects the outperformance in Q2 relative to our expectations, pipeline related to the space gains we talked about with Target, Dollar General, and Walgreens, as well as ongoing international momentum. Moving forward, our guidance approach will prioritize consistency of delivery versus the magnitude of top-line beats and raises. Starting with our second-half outlook, which implies 16%-20% net sales growth, with the top end consistent to where we exited the quarter on an organic basis. As a reminder, we start to cycle the Naturium acquisition in Q3, and its contribution to net sales growth becomes more modest versus the 16 points of top-line contribution in the first half. Additionally, we do not plan to give an outlook for tracked channel trends in the U.S., given our increasingly diversified portfolio of brands with the addition of Naturium, our expanded international penetration, and the changing definition of tracked channels with several differing data sources across Nielsen and Circana. We remain focused on continuing to deliver category-leading growth and gaining share in the U.S. while thoughtfully diversifying our brands and expanding our business internationally. Turning to gross margin. In fiscal 25, we now expect our gross margin to be up approximately 30 basis points year over year as compared to approximately 20 basis points previously. The improved outlook is largely a result of our outperformance in Q2. In terms of the key puts and takes, we expect full-year gross margin benefits from cost savings, favorable FX rates, and international price increases implemented in the second half of fiscal 24 to be partially offset by mix and higher transportation costs. Turning now to Adjusted EBITDA. For the full year, we now expect Adjusted EBITDA between $304 million-$308 million, up from $297 million-$301 million previously. Our outlook now implies Adjusted EBITDA growth of approximately 29%-31% versus prior year, up from 26%-28% previously, and on top of the strong 101% growth we delivered in fiscal 2024. We continue to expect Adjusted EBITDA margin leverage of approximately 20 basis points year over year. We still expect marketing and digital investment at approximately 24%-26% of net sales in fiscal 2025 as compared to 25% in fiscal 2024. From a cadence standpoint, we continue to plan for a more balanced pace of marketing and digital spend throughout fiscal 2025. That implies some leverage in our marketing on a year-over-year basis, particularly in Q4, as marketing spend was approximately 34% of net sales in Q4 last year. In summary, our second quarter results underscore our ability to drive consistent category-leading sales and market share growth. We believe we have a winning strategy as reflected in our raised outlook for the full year and continue to believe we are in the early innings of unlocking the full potential for our brands. With that, operator, you may open the call to questions. Thank you. We will now begin the question and answer session. To ask a question, you may press star then one on your telephone keypad. If you're using a speakerphone, we ask that you please pick up your handset before pressing the keys. To withdraw your question, please press star then two. Today's first question comes from Ashley Helgans with Jefferies. Please go ahead. Hi. Thanks for taking our question and congrats on the quarter. As mass cosmetics have slowed, have you guys reconsidered marketing spend as a percentage of sales? And then a few of your competitors have called out some challenges in the drug channel, so just anything you can tell us about drug would be helpful. Thanks. Hi, Ashley. This is Tarang. As we take a look at the category, we often find different cycles when it comes to the category. We're overall bullish on the category. Overall, as we saw, a little bit more of a pullback in Q2 with the category down 5%. Our strategy is to remain consistent, and our marketing is working. So we feel really good about kind of normalizing the pace of that marketing, that 24%-26% range throughout the year. We continue to see ROIs well above industry benchmarks, and certainly you're seeing the growth in the top line. So we feel great about our raised outlook and the cadence of our marketing spend. In terms of the drug channel, our business is probably a little bit different than some of the legacy mass cosmetics brands who are highly distributed in drug. We're still expanding in drug. Just in the last couple of years, we've gone from a two- to three-foot end cap presentation to now we're expanding in CVS and six to 10 feet of inline space. In Walgreens, we're also expanding, as we mentioned, and they're about to expand us even further in the spring. So I'd say that is more than offset any of the channel dynamics within drug. We continue to see the ability to pick up share in drug just as we have in all of our other channels. Great. Thanks so much. And congrats again. Thank you. Our next question today comes from Olivia Tong with Raymond James. Please go ahead. Great. Thanks. Congrats on the quarter. Tarang, I'd love your view on the growth of mass beauty and your ability to stay materially ahead of a slowing category. Maybe can you talk about key drivers of the market share gains, key categories, retailers, whether you saw any benefit from trade down, and as the market gets more and more competitive, how you have to adjust your strategy to offset? Hi, Olivia. So we feel great about our ability to not only deliver the exceptional growth we've seen, but also to stay ahead of the category. And I would say the drivers are highly consistent with what's driven 23 consecutive quarters of net sales growth. First and foremost is our value proposition of making the best of beauty accessible to every eye, lip, and face. Second is our power with innovation, our unique ability to get inspiration from our community and the best products and prestige, put our e.l.f. twist on, and bring them an incredible value. In our innovation, this year's innovation, we have six of the top 10 new item launches in all of color cosmetics that talks about the power of that innovation. And finally, our disruptive marketing engine, our unique ability to engage and entertain our community. We feel great about that, particularly given the white space we continue to see. From a market share standpoint in color cosmetics, not only are we proud of the 195 basis points of share we grew in this last quarter on top of the 330 basis points in Q2 of last year, but we have still significant opportunity. I feel at Target, we are their number one brand with more than 20% of their category. As you heard, Target's not standing still, rewarding us with more space. We have major opportunity across all of our retail customers. We have two of the fastest-growing skincare brands. And then international has been particularly exciting as we start to roll out the brand in different markets. So I feel great about continuing to follow this core playbook in terms of our ability to continue to disrupt the market and continue to build share. That's helpful. I want to follow up on your decision to go into Dollar General. Are you replacing Maybelline or CoverGirl, or is Dollar General just expanding the space that they give to beauty? And how do you think existing retailers view your expansion into the dollar channel? I think first of all, on the strategy, our mission is to make the best of beauty accessible to every eye, lip, and face. And the accessibility is quite important to us. Dollar General's stated strategy of serving the underserved fits perfectly. If you think about 80% of their stores are in rural areas with less than 20,000 consumers. Previously, those consumers only had access to some of the legacy mass brands. And so our ability to bring them access to the best of beauty, we think works really well. And so I would say in terms of who we're displacing, there are a couple of different brands that we're displacing. And I'm particularly excited about the presentation Dollar General is giving us. Instead of being on the normal wall with pegs, we have this great endcap presentation that really highlights the best of beauty. We're excited about the first set of doors that we get into, and we'll see where we go from there. Thank you. Our next question today comes from Bill Chappell with Truist Securities. Please go ahead. Thanks. Good afternoon and congratulations. Just to bring the question of the day, obviously, would be tariffs. So maybe you could just kind of remind us and Mandy how you dealt with tariffs in the past administration and kind of how you're thinking about it, or if you're even starting to think about it or prepare for it if there's another round as we move into 2025. Hi, Bill. Yep, Mandy here. Tariffs, so to address what we've done previously with tariffs, so to take you back to 2019, we did experience tariffs at the 25% level. In order to offset those tariffs, we had a number of levers at our disposal. We had cost savings with our suppliers, cost concessions with our suppliers, foreign exchange moved into our favor, and we also took pricing on about a third of our portfolio at that time. As we think about where we are today, I would say back in those days, we were about 99% of our products was coming out of China. Today, we are about 80% coming out of China. And I would say that's an additional lever that we have in our back pocket to continue to diversify. But also, if you think about our international growth and penetration, we just talked about seeing international grow 91% and represent 21% of our business this quarter. That also will help to offset the impact of tariffs as we import into countries that are not subject to tariff. And so we certainly have run a number of scenarios for potential tariffs, and I think still too early to tell what level those may come in, but we have a playbook and we have a number of levers at our disposal. And I'll just add to that, Bill, that tariffs will have no impact in FY25. It's when the new administration comes into power. We'll see what they enact. And given the length of our supply chain, this is something that would potentially hit us later in 2026. And to Mandy's plan, we have a well-balanced plan with a combination of select pricing, cost savings, FX, supplier concessions, and further diversification. So I'm highly confident of our team's ability to navigate tariffs or no tariffs. Thank you. Our next question today comes from Peter Grom at UBS. Please go ahead. Thanks, operator. Good afternoon, everyone. Hope you're doing well. Mandy, I think you mentioned something around a shift in the guidance approach. I think specifically you said prioritizing consistency of delivery versus the magnitude of top line beats and raises. Can you maybe just unpack that a bit more just in terms of how we should be thinking about that shift in approach? Absolutely. Hi, Peter. I would say that largely our guidance strategy remains consistent as it has for the last 23 quarters, and it served us well. We're anchoring on annual guidance. We are taking it a quarter at a time, and so that is consistent. That's what I mean by consistency. As we grow into a larger company, it's just a law of big numbers. The magnitude of beats and raises will be smaller. And so that's really a little bit of a shift for us. But in terms of consistent delivery, I think we've done that for the last 23 quarters and believe that we have the right recipe to continue to do so. Thank you. And our next question today comes from Andrea Teixeira with J.P. Morgan. Please go ahead. Hello, Mr. Teixeira. Your line's open. All right. Looks like we lost our connection. Our next question comes from Dara Mohsenian with Morgan Stanley. Please go ahead. Thanks, operator. So two things for me. Just a follow-up, Tarang, you obviously gave the reasons why it makes sense to go into Dollar General. Can you just talk a little bit about why the timing is right today to do that and what changed on that front, and just how you manage any potential risk to brand equity as you move more aggressively into lower-priced channels? And then on the fiscal back half revenue guidance, can you just detail what you expect for category growth? I'm assuming things perhaps get better as the comparisons get easier, but what have you embedded in your guidance? And just Tarang, any perspective as you take a step back? It's been a pretty consistent category over time. So maybe just some perspective on the weakness we've seen in the category more recently and what you think is driving that and how you think about the category performance going forward. Thanks. So, Dara, in terms of our distribution on Dollar General, we do a lot of our distribution plans well in advance. So these conversations started more than a year in advance. And again, it was a refinement on strategy. They want to make a bigger presence in beauty. They particularly want e.l.f. And as we take a look at it, it resulted in a much better presentation than you're going to see from other brands. So from an overall brand equity standpoint, what we find is e.l.f. is highly elastic. We can play in value. We can also play in prestige. I mentioned during our prepared remarks, we also entered Sephora Mexico just a few weeks ago and were their number one brand on both units and dollars. And if you take a look at the presentation in Sephora, it's, I think, better than most of the prestige brands they carry. So e.l.f. is a brand that has that elasticity. The most important thing, though, for us is to make sure that we're serving our community. And there's a whole set of consumers that have been underserved, particularly in those smaller rural areas, that now will have access to e.l.f. So I'm personally excited about Dollar General and also excited about really across all of our retail customers in terms of how we show up as we go through. And then in terms of the category growth, I take a longer-term arc. I remain bullish on the color cosmetics and skincare categories. We have seen different cycles where it slowed. And sometimes we haven't been able to find exactly what's going on in terms of we've seen an overall pullback across a number of consumer categories. We've experienced this before. We bought the company in 2014. In the summer fall of that year, we saw a little bit of a dip, only for it to roar back for the next couple of years. We certainly saw it in 2018, certainly when the pandemic hit. In every one of those instances, we saw the category bounce back quite strongly. Even after the pandemic, we saw that. And last year, really last couple of years, category has been pretty strong. So I remain bullish on the category overall. And the way that we build our overall guidance is not anchored on the overall category as much as it is the market share. We know that we can continue to build the pipeline of the space expansions we talked about and the continued international expansion. So we feel highly confident in terms of our ability to continue to drive outsized growth regardless of where the category bounces around. Thank you. And our next question today comes from Oliver Chen at TD Cowen. Please go ahead. Hi, Tarang and Mandy. You've had lots of great innovation. If tracked channels do continue to be worse or softer than you expect, what's in your toolbox in terms of what you can do in that bear case scenario? Also, unfortunately, on the ERP side, we've seen a lot of companies have issues with ERP. It's not an easy thing to do. Just processes you have in place to minimize the execution risk there. And finally, international, lots of great progress and awareness there. And what are the building blocks we should think about as you think about infrastructure and accounts and timing of countries as well as TAMs that would be good for investors to focus on as they look to model that as well? Thank you. Hi, Oliver. Thanks so much for the questions. So from a tracked channel perspective, I mean, we're really, as we said on the call, not giving any color really around tracked channels. What I would love to anchor you to is what our guidance implies for the second half of the year, and that's really the 16%-20% growth. As I said on the call, the 20% really a continuation of what we saw out of Q2 on an organic basis, so we feel great about our outlook as we look into the second half. Again, those drivers, building market share in the U.S., the pipeline associated with the space expansions that we just talked about with Target, Walgreens, and Dollar, and then also continued international momentum, so those are really the building blocks that we see in the second half of the year. On the ERP side, just to give you all an update on that, we are expecting to go live on SAP later in the spring of 2025. But we also have aligned as a team here to say that if we do not feel like we're prepared, we're not going to flip the switch on the ERP. So we want to minimize risks through that way. Oliver, we're doing a lot of testing, a lot of preparation, and a lot of training of the team here before we go live, and so trying to learn from mistakes of others that have gone through these types of transitions and want to make sure we have it 100% right before we flip the switch there. And then on your question on international, I feel great about the investments we're making to continue to fuel and our ability to supply the global demand that we're seeing. As we mentioned a few calls ago, we have built a team in the U.K. in London. We're also putting people in different markets around the world. And that's been a continual investment. We're also adding to other members of the team to make sure that we can support the international growth. And it's well planned. And it's not just the team, but it's also the infrastructure. We've added distribution capacity over the last, gosh, 18 months for the growth that we know that we're going to be getting within international. And so I feel good about our ability to continue to map it. And I think it's also aided by our strategy. We're not in a hurry to get into 30 countries all at once. We like this disciplined sequential approach to find a leading beauty retailer, partner with them, establish ourselves in a market, and then look to expand from there. So it's well within our control in terms of the pacing and how we make sure that we follow that. Thank you. And our next question today comes from Shivan Chowdhury with J.P. Morgan. Please go ahead. Hi. I don't know if you can hear me. I have a question on sell-in. Okay. I have a question on sell-in and sell-out and a clarification. If you can comment on the sell-in growth in the U.S., ex-Naturium, it seems like to be around mid-single digits. And was the consumption across all channels for the brands ex-Naturium at a similar pace, or is there any inventory stock in that source of headwind? If not, how was the cadence? How have you assessed the quarter with growth faster? You mentioned that obviously in these situations, and we saw that in COVID, things bounced back, but perhaps there was a lot of volatility into elections and all of that that may have caused some of this volatility there. Then a clarification on Dollar General. I mean, again, congrats on entering. It seems like a very complimentary retailer, as you said. How many doors are you planning, and when should we see, obviously, the impact on the numbers if it's included more into the back end of the fiscal or even fiscal 2026? Thank you for both. Hi, Andrea and Shivan. So, from a sell-in, sell-out dynamic, we are not really seeing anything on our end. Again, as a reminder, elf is the most productive brand carried by our retailers. And so they really do need to kind of reorder to keep up with the demand that we're seeing there. I would say from a category bounce back and the volatility, the category and the tracked channels piece is going to continue to be volatile as we look out. And that's why we're kind of just focusing more so on our overall guidance, our annual guidance of 28%-30% for the year, very strong and kind of focused on those building blocks that I talked about, the continuing to build market share, the pipeline that we have in place, and then the international momentum that we're seeing. And then on your follow-up question, Andrea, on Dollar General, we haven't disclosed how many doors, but what I can tell you is it's a subset of the chain that we'll be starting in November. That'll give us the ability to get some experience with the channel, see how we feel it's going to do well, see how it goes before deciding on further expansion. But again, very excited about the complementary nature of the customer and accessing new consumers and feel it will be highly incremental relative to other channels. Thank you. And our next question today comes from Susan Anderson at Canaccord Genuity. Please go ahead. Hi. Good evening. Nice job on the quarter. I guess maybe I was wondering a little bit more on the innovation front. You talked about maybe having a little bit less this quarter. I guess what franchises or categories do you think there's opportunity still to roll out new innovation? And then how long does it take, I guess, from incubation to shelf to get product out there? I guess when should we expect more newness to come out? And then just really quick on the inventory, it looks like it did come down this quarter. So I'm curious if you're done kind of building up that excess inventory that you needed and how we should think about that, the inventory growth as we go forward. Thanks. Hi, Susan. So in our remarks, what we're really commenting on is our tracked channel growth came in at slightly below the 20% we were outlooking. It came in at about 16%. So still 16% growth. It still was strong. We still picked up a ton of share. We cited two factors. One was we did see a little bit of a pullback in consumer in terms of the category being down 5%. The other thing we had is we had a perfect storm last year in terms of a couple of our core franchises, Power Grip Primer and Halo Glow Liquid Filter. We're getting back in stock on Power Grip Primer. We had a ton of support on it coming off the Super Bowl and continue to run those spots. On Halo Glow Liquid Filter, we have basically launched our Halo Glow Wands, which went viral and basically got that whole franchise going and the level of support. So we're really talking about the mix between some of those core franchises and our new products. Our new products this year actually were stronger than we were expecting, having six of the top 10 items in all of color cosmetics in terms of newness. So we feel great. So the indicated action for us is just making sure we better balance the support we have behind these franchises and our new items. Now, the good news, even on our core franchises on Power Grip, we have two of the top three SKUs in the entire cosmetics category. So it talks about the strength that we have in Power Grip and Halo Glow is also one of our core franchises as we go forward. You're going to see reanimations of those as we continue the year. And the other thing that I'm particularly encouraged by is if you think about our spring innovation, a number of our spring innovation are going to be focused on some of our core franchises. And we've seen every time we can bring significant news to a particular franchise, it further accelerates a franchise. I feel, again, great about the business overall, even in our core franchises, the strength that we have there, and then the ability to continue to reanimate them and come out with newness on them. That will be by spring. We've got a very full slate of innovation coming up. Susan, on your question on inventory, we feel great about our inventory position and feel that we have the inventory that we need to continue to support the demand that we're seeing. In terms of build-up, we haven't given an outlook, but I do feel comfortable saying that as we go into kind of this third quarter, typically there's a build-up as we're kind of looking at our spring innovation and there's pipeline and things like that that need to go out. And then you should see it come down a bit more as we get into Q4 and exit this year. Thank you. And our next question today comes from Anna Lizzul with Bank of America. Please go ahead. Hi. Good afternoon. Thank you so much for the question. I was wondering if you could talk a bit more about the sales that you're seeing between channels and retailers and any shift here in purchasing habits that you're seeing between different retailers themselves and also versus online. And then in terms of the Dollar General expansion, I was wondering what the product assortment is that you're planning to feature there. Thank you. So hi, Anna. I'd say we're seeing broad-based strength across each of our channels and core customers as we take a look. I think sometimes on the Nielsen data or the Circana data, it will bounce around also based on what was going on last year. So for example, around this time last year, we had a massive launch of our lip oils at Ulta Beauty that will be comping as you go through. But those things tend to even out over time, particularly between our different retailers and the breadth of distribution that we have. So I feel good about kind of the overall strength, not only with our national retailers, but also digital consumption continues to be strong at 40% in the quarter on top of over 70% last year, and then certainly international. So because we have that diversity of levers between our national retailers, our digital business, and international, we feel really good about kind of the growth prospects there. Then on Dollar General, as we said, we are making the best of beauty accessible. So we have not modified our assortment. We're bringing our best products, our holy grails, to the dollar channel. And we feel great about the assortment, about the presentation, the merchandising that we'll have as we enter the Dollar General stores. Thank you. Our next question today comes from Linda Bolton Weiser with D.A. Davidson. Please go ahead. Hi, yes. Thank you. My first question had to do with mix You said the mix effect on gross margin was negative in the quarter because of Naturium moving into wholesale channels. I was curious, if you exclude the Naturium effect, was mix a negative or positive effect on gross margin? And then related to that, is the international growth a negative or positive for the mix effect on gross margin? And then my second question was around growth, growth long-term and growth rates and slowing and accelerating and decelerating seems to be on the minds of investors. So I'm wondering if you've thought about defining a long-term growth algorithm that helps investors understand how rapidly you can expand into these various areas that you're expanding internationally, new brands, etc. And if you think a growth algorithm long-term might help, you did have one when you were a lower-growth company. So I'm curious why you're hesitant to state one now that you have such good growth. Thank you. Hi, Linda. I'll take the question on gross margin. So one, I would say I'm very pleased with our gross margin progression. Our gross margin was up 40 basis points this quarter. We raised our outlook on gross margin from 20 basis points previously up to 30 basis points on the year. We feel great about our gross margin. The reason we called out the mix piece is because Naturium did start to go into wholesale. That was planned and expected. We feel great about our gross margins overall. International gross margins, as you kind of may have talked to earlier, are really, as we think about that diversification, international is a help in that way because they are not subject to the tariffs. Naturally, that would lead to a little bit of better gross margin as you think about that. In terms of long-term growth algorithm, Linda, we've heard mixed things from investors. Some have said, "Hey, the last time you put out long-term growth algorithm, it was woefully inadequate." I think we had said we're going to grow mid to high single digits, and you've seen the growth we've delivered over the last five years. So there's some part of it does it box us in. Now, having said that, we also think it's a fool's errand to go pay attention to weekly Nielsen data, which I think some investors have been a little bit too preoccupied with. I think they're missing the entire point. Periodically, we will go and refresh what correlates most closely with our long-term share performance. And for us, there's three measures: net sales growth, adjusted EBITDA growth, and market share. And those are the three things we're absolutely focused on. You can see the first two in terms of our raised guidance. We feel really good about continuing to be able to drive outsized growth within our industry, and that, in turn, is leading to very strong market share growth. Those are the things we're staying focused on. We'll continue to discuss if it makes sense to put out a longer-term number. We certainly have our long-range plans, really great visibility to our business, including the three areas of white space and color cosmetics, skincare, and international. We'll, I think, continue to debate that. Right now, I think what you can continue to expect is industry-leading growth and market share gains. Thank you. Our next question comes from Korinne Wolfmeyer with Piper Sandler. Please go ahead. Hey, good afternoon. Thanks for taking the question. I'd like to touch a little bit on the EBITDA number you put up. I mean, last quarter, you were kind of talking down the EBITDA margin. I believe you were kind of targeting the low teens. And obviously, you came in well ahead of that. It does seem like there was a little bit of spend that was pushed into Q3. So maybe you could help us quantify how much was pushed into Q3 in the back half and how we should be thinking about the cadence of the margin between Q3 and Q4. Thanks. Hi, Korinne. So our EBITDA did come in a little bit better than we expected for the quarter. And as I talked in our prepared remarks, that really comes down to expense timing shifts out to Q3. We saw expenses both in marketing and in non-marketing SG&A shift out to Q3. And so when you look at the second half, our guidance roughly implies a 23-ish% EBITDA margin. You can envision that the Q3 margin would be a little bit lower because of those expenses that we just talked about shifting, and then Q4 a little bit higher than that 23% that we're outlining for the second half. Thank you. And our next question comes from Mark Altschwager with Baird. Please go ahead. Thank you. Good afternoon. On the international, great to see the continued momentum there. Was the channel fill tailwind from new distribution materially different this quarter versus what you've seen in recent quarters? And then just any other considerations as we contemplate the international growth in the back half of this year? And then just more broadly on the revenue guide, 16%-20% for the back half, just any help there on how to model the cadence Q3 versus Q4? Thank you. Hi, Mark. This is Tarang. I'd say international is largely consistent. If you look at the growth we had in Q1, I think that was above 90% as well, or 91%. We feel good about there will be different timing in terms of when pipeline goes into a particular launch for a particular launch customer. But overall, I think what we're most pleased by is the overall consumption that we're seeing in terms of really being able to go out the gate at number o ne with Sephora Mexico, with Rossmann Germany, Etos, Douglas Italy, as well as the strength we're seeing in our existing market. So we feel it's pretty solid. We have an outlook what the international growth would be in the back half other than we expect it to continue to be strong. Right. And then for the second half, really not providing any quarterly color other than to say we've outlooked 16%-20% for the second half. And we feel great about the building blocks that we have in place to achieve that. Thank you. And our next question today comes from Mark Astrachan with Stifel. Please go ahead. Yes, thanks. Good afternoon, everyone. I wanted to ask about inventories again. I guess it still seems like it's a bit higher than maybe I would have expected given your expectations for decelerating growth. And I look at it on a year-on-year basis. It was up more sequentially one Q24 to two Q24 and year-on-year then, but the growth was also much greater. So, I guess trying to figure out, is there something going on? Is there too much inventory? What would be the timing of how long it's potentially good for? Are there any concerns around obsolescence? And maybe not any of that. And I guess just the other sort of question is, is part of this related to what you talk about in terms of timing of when you're taking ownership from China? And maybe just explain that a little bit more in terms of what specifically is going on and why you'd want to hold more inventory. Thank you. Hi, Mark. Yep. So let me just maybe take you back a couple quarters on our inventory. So last year around this time is when we started talking about the change with taking ownership earlier. So we're taking ownership when product leaves China instead of when it arrives here. So that had an impact on inventory. That has been for the last couple quarters that we've been talking about that. So that's not a new thing or a new addition to our inventory narrative here. And I want to address your question on obsolescence as well. There is no risk of obsolescence overall for our portfolio, color cosmetics, anything like that. And what you're seeing in the build on inventory, as we've talked about, is really building for that global footprint. So we've talked about setting up distribution centers across the world, in Asia, in Germany, in the U.K., here with a second DC here in the U.S., additional nodes on our E-Commerce. So that also leads to higher inventory levels overall, but allows us to service the demand that we're seeing. So we feel quite comfortable with the inventory that we have on hand and believe that it will be enough to help service that demand that we're seeing. Thank you. And our next question comes from Rupesh Parikh with Oppenheimer. Please go ahead. Good afternoon. Thanks for taking my question. So just going back to Naturium, I was curious how it's performing at Ulta and then how you guys are thinking about further distribution opportunities from here. Hi, Rupesh. This is Tarang. We feel great about Naturium. As a reminder, we acquired it about a year ago, and the brand's continued to see very strong growth. We're very pleased with the launch at Ulta Beauty. We have a full assortment, not only in facial skincare, but also in body. And I think really good presentation there as well. Naturium will continue to look at other expansion opportunities on Naturium, not only in the U.S., but also internationally. We just got into our first set of doors at Boots in the U.K. in addition to Space NK, where we were distributed there. We think Naturium has a big opportunity, particularly in expansion of distribution as well as innovation. Thank you. This concludes our question and answer session. I'd like to turn the conference back over to Tarang Amin for closing remarks. Thank you for joining us. I'm so proud of the incredible team at e.l.f. Beauty for delivering another quarter of industry-leading growth. Thank you to every e.l.f. and every e.l.f. partner for your passion and dedication to our vision of creating a different kind of beauty company. We look forward to seeing some of you at our upcoming investor meetings and speaking to you in February when we'll discuss our third quarter results. Thank you and be well. Thank you. This concludes today's conference call. We thank you all for attending today's presentation. You may now disconnect your lines and have a wonderful day.