Good morning. When Fortune released its 100 Fastest-Growing Companies list this week, the newcomers included e.l.f. Beauty. It’s 50 years younger than most companies on the list.
The cosmetics and skincare company is 20 years old, while the average age of companies on the list is 70. E.l.f. Beauty took the No. 3 spot this year. It had the third-highest three-year annual total shareholder return rate on the list, at 98.1%.
In its 39th edition, Fortune’s 100 Fastest-Growing Companies ranking is determined by a company’s revenue growth, earnings per share growth, and three-year annualized return to shareholders for the period ended June 28. All of the companies on the list trade on a U.S. stock exchange, report their data in U.S. dollars, and file SEC quarterly reports.
Courtesy of e.l.f. Beauty
When I recently had a conversation with e.l.f. Beauty’s CFO Mandy Fields, she told me the company has had 22 consecutive quarters of net sales growth. Its next earnings report will be released on Nov. 5.
E.l.f. Beauty is a favorite brand among Gen Z, and is gaining popularity with millennials and Gen X. Along with its value proposition—most products retail for about $6—and a push for innovation, marketing is another growth driver, which includes Super Bowl ads and a big social media presence.
“We go on TikTok, and talk to our community, asking, ‘What do you want from e.l.f.?’” Fields explained. And she’s made appearances on e.l.f.’s Twitch channel.
But the company’s strength is also in part drawn from having a diverse executive team and employee base, Fields said. The diverse representation within the company “absolutely has an impact on what we produce from a product standpoint and our marketing campaigns,” she said.
E.l.f. beauty’s board of directors is 78% women and 44% diverse, which reflects the communities the company serves, Fields noted. The company has embarked on an initiative called “Change the Board Game,” working toward the goal of doubling the representation of women and diverse candidates on public corporate boards by 2027. In collaboration with North Carolina A&T University, it has also released research on the benefits of board diversity.
Tarang Amin, CEO and chairman of e.l.f. Beauty has been very intentional, conducting extensive searches to ensure there’s diverse representation on boards, which includes diversity of thought, Fields said.
She joined e.l.f. Beauty as CFO in 2019 and has over 20 years of finance experience in finance. “I became CFO of a private company when I was 35 years old,” she told me.
Younger generations, in particular, want to support companies that reflect their communities, Fields said. They want to know who’s on the company’s board and management team.
“We want to make sure that they when they go and check e.l.f. out, we’re walking the walk,” she said.
Sheryl Estrada
sheryl.estrada@fortune.com
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Leaderboard
Jarrod Yahes, CFO at Shutterstock, Inc. (SSTK), is stepping down to pursue a new opportunity, effective, Nov. 1, according to an SEC filing. The company has promoted Rik Powell to replace Yahes. Powell has been SVP of finance and investor relations since June. Before Shutterstock, he was SVP of finance and investor relations at Shake Shack. Powell was also previously CFO of Getty Images.
Big Deal
Google parent Alphabet reported its third-quarter financial results on Tuesday. Revenue for the company grew 15% to $88.3 billion in the third quarter, above Wall Street targets of $86.3 billion. The cloud unit revenue came in at $11.4 billion, up 35% from the same period last year.
It was the first official earnings call for Google’s CFO Anat Ashkenazi, who joined the company on July 31. As the new finance chief, Ashkenazi took a moment to share her thoughts on how she’s approaching growth, cost structure, and capital allocation.
“As I look at the business, I see opportunities for further growth propelled by AI and the underlying momentum across the business,” she said on the call. “I also believe that we are well positioned to deliver meaningful innovation, which will translate to revenue given our strength in the core pillars that are required to succeed in AI at scale.”
The company has a strong balance sheet to be able to support these investments. However, “we will be looking for efficiencies so that we can fund innovation in priority areas,” Ashkenazi added.
Ashkenazi explained that Pichai, Ruth Porat, former CFO and now chief investment officer at Google, and the leadership team started important work to re-engineer the company’s cost structure and streamlining operations with AI. “I plan to build on these efforts, but also evaluate where we might be able to accelerate work and where we might need to pivot to free up capital for more attractive opportunities,” Ashkenazi said.
Going deeper
“The next big arenas of competition,” is a new report released by McKinsey Global Institute. Arenas are industries that transform the business landscape. The report points to 18 future arenas that could reshape the global economy and generate $29 trillion to $48 trillion in revenues by 2040. “These arenas range from AI software and services to cybersecurity, from future air mobility to drugs for obesity and related conditions, and from robotics to non-medical biotechnology,” according to the report.
Overheard
“The outlook for the fourth quarter is clearly still somehow influenced by the uncertainties we see on the macroeconomic and geopolitical front, we have the upcoming elections in the U.S., which of course is not going to be an uneventful event.”
—Sergio Ermotti, CEO of Swiss bank USB told CNBC in an interview on Wednesday. For the third quarter, the bank surpassed expectations with $1.4 billion in profit.
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