Marathon Partners Delivers Letter to e.l.f. Chairman and CEO Calling for Change

NEW YORK, Sept. 12, 2018 /PRNewswire/ -- Marathon Partners Equity Management, LLC, a New York-based investment firm, and its affiliated investment funds (collectively "Marathon Partners"), which beneficially own approximately 8.5% of the common stock of e.l.f. Beauty, Inc ("e.l.f." or the "Company") (NYSE: ELF), announced today that it has delivered a letter to Tarang P. Amin, e.l.f.'s CEO and Chairman of the Board of Directors (the "Board"), urging the Board to consider strategic alternatives including materially reducing operating expenses (including executive compensation) or a potential sale of the Company.

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In its letter to the Board, Marathon Partners recommended two courses of action for e.l.f.:

• Refocus on core operations: cease evaluation of acquisition targets, reduce and optimize high-cost structure (including executive compensation) to fund brand investment, boost margins, and grow profits well in excess of top-line growth.
• Sale of the Company: If the Board and management are unwilling to substantially reconsider their current strategy, the only responsible alternative is to pursue a sale of the Company through a competitive auction process.

Mario Cibelli commented, "e.l.f. has created a differentiated and valuable platform that has helped the core brand stay in close contact with consumers and stand out with highly productive space at retail partners. While we applaud the management team for their success thus far, we are confident that our call for significant change at e.l.f. is correct and timely.  The e.l.f. brand is carrying a great burden, covering all of the overhead of a platform designed to support multiple brands as well as an extremely generous compensation plan for senior executives. Asking shareholders for more patience, while the burden on profits and the discount to intrinsic value remains so high, is unacceptable."

Mr. Cibelli continued, "We have significant concerns regarding TPG's level of influence at the Company and the Board's lack of urgency in addressing opportunities to increase shareholder value.  Multiple factors, including TPG's role on the compensation committee, heighten our concerns in this area.  This dynamic necessitates the addition of new Board members who can better represent the interests of public, non-insider shareholders.  It is time for the Board to move the outside shareholders to the forefront of the conversation as it seeks the best way forward for the Company."

The full text of Marathon Partners' letter to the Chairman of the Board can be viewed at the following link: https://mma.prnewswire.com/media/743215/Marathon_Partners_Letter.pdf

About Marathon Partners

Marathon Partners Equity Management, LLC is a fundamental, research intensive investment firm that deploys capital with a long-term investment horizon.

Investor Contact
Mario Cibelli
(212) 490-0399
http://www.marathonpartners.com

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SOURCE

Marathon Partners Equity Management, LLC

SOURCE Marathon Partners Equity Management, LLC

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