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    ELF
    Earnings call· Mar 2026(Q4 FY26)

    e.l.f. Beauty Q4 FY26 earnings call ELF

    May 20, 2026 Source

    Executive summary

    e.l.f. Beauty Q4 FY26 — Strong Portfolio Growth Despite Core Brand Moderation

    e.l.f. Beauty delivered its seventh consecutive year of industry-leading growth, driven by its diversified brand portfolio, particularly strong performance from Rhode and Naturium. While the core e.l.f. brand experienced moderated growth and slower-than-expected spring innovation, management is implementing targeted actions including pricing adjustments and fast-tracked innovation to reaccelerate unit growth. The company maintains a strong balance sheet and is focused on international expansion and leveraging its disruptive marketing engine across its brands.

    Highlights

    5

    • Net sales grew 25% in FY26 and 35% in Q4 FY26, marking the 29th consecutive quarter of net sales growth.

    • Rhode contributed $113 million, or approximately 34 percentage points, to Q4 net sales growth, exceeding expectations.

    • Q4 gross margin of 73% was up approximately 140 basis points compared to the prior year, driven by pricing benefits.

    • The company ended FY26 with a strong cash balance of $290 million, up from $149 million a year ago.

    • e.l.f. Beauty repurchased approximately $50 million of common stock in FY26, with $400 million remaining under authorization.

    Concerns

    5

    • e.l.f. brand global consumption moderated from high single digits in FY26 to low single digits in the last 12 weeks.

    • Spring 2026 innovation for the e.l.f. brand was off to a slower start than expected, not delivering historical lift.

    • Q1 FY27 organic net sales are expected to be down high single digits due to lapping a busy shipping period and ERP cutover.

    • Higher marketing and digital spend, along with investments in team and infrastructure, led to a decrease in Q4 adjusted EBITDA to $59 million (from $81 million YoY) and adjusted net income to $19 million (from $45 million YoY).

    • The company estimates $15 million to $20 million of incremental cost headwinds in FY27 if oil prices remain around $100 per barrel.

    Guidance & targets

    15
    CategoryTargetConfidence
    Net sales growth
    approximately 12% to 14%
    high materiality
    High
    Adjusted EBITDA
    $379 million to $385 million
    high materiality
    High
    Adjusted Net Income
    $198 million to $201 million
    high materiality
    High
    Adjusted EPS
    $3.27 to $3.32 per diluted share
    high materiality
    High
    Adjusted Tax Rate
    approximately 25% to 26%
    medium materiality
    High
    Fully Diluted Average Share Count
    approximately 60.5 million shares
    medium materiality
    High
    Rhode contribution to full year net sales growth
    approximately 9 percentage points
    high materiality
    High
    Rhode net sales contribution (first 4 months)
    approximately $140 million
    medium materiality
    High
    Organic net sales growth
    up approximately 4% to 5%
    high materiality
    High
    Organic net sales growth
    down high single digits
    high materiality
    High
    Organic net sales growth
    mid-teens range
    high materiality
    High
    Gross margin
    approximately flat year-over-year
    high materiality
    High
    Adjusted EBITDA margins
    approximately 21%, up about 20 basis points year-over-year
    high materiality
    High
    Adjusted EBITDA margins
    high teens
    medium materiality
    High
    Marketing and digital spend as % of net sales
    approximately 23% to 25%
    medium materiality
    High

    Segment performance

    4
    SegmentRevenueYoYQoQMargin
    e.l.f. Cosmetics
    Largest share gain among nearly 1,000 cosmetics brands tracked by Nielsen. Significant runway for growth to bring other retailers to Target's level. Global consumption moderated from high single digits in FY26 to low single digits in the last 12 weeks.
    Global retail sales: $1.8 billionU.S. market share gain: 115 basis pointsU.S. mass color cosmetics national share: 13%Target share: 21%Consecutive quarters of market share gains: 29
    		$1.8 billion———
    e.l.f. SKIN
    Applying same innovation strategy as e.l.f. Cosmetics. Significant opportunity for further share gains compared to the #1 brand's 13% share.
    Global retail sales: $200 millionU.S. mass skin care brand ranking: #11 (from #25 five years ago)U.S. mass skin care share: 2%
    		$200 million———
    Naturium
    Clinically effective biocompatible skin care brand acquired almost 3 years ago. Plenty of white space ahead.
    Global retail sales: $250 millionFastest-growing among top 50 skin care brands in Q4
    		$250 milliondouble its pre-acquisition levels——
    Rhode
    High-growth beauty brand acquired last August, continues to exceed expectations. Tremendous opportunity in coming years with further Sephora expansion.
    Global retail sales (annualized FY26): over $500 millionNet sales (FY26): approximately $390 millionNet sales growth YoY: over 80%#1 beauty brand ranking in Sephora North AmericaSephora global stores penetration: less than 20%MECCA Australia and New Zealand launch: biggest in history
    		$500 million (global retail sales, annualized FY26), $390 million (net sales, FY26)over 80%——

    Operational metrics

    34
    Net Sales Growth
    35%year-over-year
    Q4 FY26

    Company-wide net sales growth.

    Rhode contribution to Q4 Net Sales Growth
    34
    Q4 FY26

    Contribution from the acquisition of Rhode.

    Organic Net Sales Growth (ex-Rhode)
    1%year-over-year
    Q4 FY26

    Net sales growth excluding the contribution from Rhode.

    U.S. Net Sales Growth
    26%
    Q4 FY26

    Net sales growth in the U.S. region.

    International Net Sales Growth
    75%
    Q4 FY26

    Net sales growth in international regions.

    Pricing and Product Mix contribution to Net Sales Growth
    40
    Q4 FY26

    Contribution to net sales growth from pricing and product mix.

    Unit Volumes impact on Net Sales Growth
    down 5
    Q4 FY26

    Impact of unit volumes on net sales growth.

    Gross Margin
    73%up 140 basis points compared to prior year
    Q4 FY26

    Company-wide gross margin.

    Adjusted SG&A as % of Net Sales
    67%compared to 52% in Q4 last year
    Q4 FY26

    Adjusted Selling, General & Administrative expenses as a percentage of net sales.

    Marketing and Digital Investment as % of Net Sales
    31%compared to 23% in Q4 last year
    Q4 FY26

    Marketing and digital investment as a percentage of net sales.

    Full Year Marketing and Digital Investment as % of Net Sales
    24%
    FY26

    Full year marketing and digital investment as a percentage of net sales, in line with outlooked range of 24% to 26%.

    Adjusted EBITDA
    $59 millioncompared to $81 million in Q4 last year
    Q4 FY26

    Adjusted Earnings Before Interest, Taxes, Depreciation, and Amortization.

    Adjusted Net Income
    $19 millioncompared to $45 million in Q4 last year
    Q4 FY26

    Adjusted net income.

    Adjusted EPS
    $0.32compared to $0.78 per diluted share a year ago
    Q4 FY26

    Adjusted Earnings Per Share.

    Net Sales Growth
    25%
    FY26

    Full year company-wide net sales growth.

    Adjusted EBITDA Growth
    13%
    FY26

    Full year adjusted EBITDA growth.

    Adjusted EBITDA Margins
    20%
    FY26

    Full year adjusted EBITDA margins.

    Average Tariff Rate
    55%more than double the 25% rate a year ago
    FY26

    Average tariff rate faced by the company.

    Cash on Hand
    $290 millioncompared to $149 million a year ago
    FY26 end

    Cash balance at fiscal year-end.

    Stock Repurchased
    $50 million
    FY26

    Amount of outstanding common stock repurchased.

    Remaining Repurchase Authorization
    $400 million
    FY26 end

    Amount remaining under the previously authorized $500 million repurchase program.

    Net Debt to Adjusted EBITDA
    less than 2x
    FY26 end

    Leverage ratio.

    e.l.f. brand global consumption growth
    low single digitsmoderated from high single digits in FY26
    last 12 weeks

    Consumption trend for the e.l.f. brand.

    Halo Glow skin tint price reduction
    from $18 to $14
    recent test

    Price adjustment for a specific product.

    Halo Glow skin tint unit lift (Amazon)
    38%
    initial test results

    Unit sales increase following price reduction.

    Halo Glow skin tint unit lift (all retailers)
    36%
    initial test results

    Unit sales increase following price reduction across all retailers.

    Halo Glow skin tint sales lift (TikTok Shop)
    triple-digit
    initial test results

    Sales increase following price reduction on TikTok Shop.

    e.l.f. unaided awareness
    45%from 13% in 2020
    2025

    Expansion of e.l.f.'s unaided brand awareness.

    International Net Sales % of Total
    20%
    FY26

    International sales as a percentage of total net sales.

    e.l.f. brand social followers outside U.S.
    50%
    current

    Percentage of e.l.f. brand social followers located outside the U.S.

    Rhode social followers outside U.S.
    74%
    current

    Percentage of Rhode social followers located outside the U.S.

    IEEPA tariffs refund pursuing
    $58.5 million
    last year

    Amount of IEEPA tariffs paid that the company is pursuing a refund for.

    FY27 Tariff Rate Assumption
    35%
    FY27

    Assumed tariff rate for fiscal 2027.

    FY27 Incremental Cost Headwinds (oil)
    $15 million to $20 million
    FY27

    Estimated incremental cost headwinds if oil prices remain around $100 per barrel on average.

    Industry KPIs

    7
    MetricValueDetails
    Channel mixtriple-digit sales lift%
    Portfolio rotationKeys Soulcare brand
    Underlying sales growth25%%
    Brand marketing investment24%% of net sales
    Brand health superiority scores45%%
    Market value share by geography115 basis pointsbasis points
    Developed vs emerging market split20%%

    Product announcements

    4
    ProductTypeDetails
    Fragrance partnership with H&Mlaunch
    Power Grip styling collectionlaunch
    Keys Soulcare branddiscontinuation
    Rhode Caffeine Reset Mask and Peptide Lip Bootslaunch

    Deals & partnerships

    2
    RhodeAcquisition of high-growth beauty brand founded by Hailey Bieber.

    Acquired last August, continues to exceed expectations.

    Alicia KeysTransfer of the Keys Soulcare brand.

    Decision allows e.l.f. Beauty team to better focus on its five core brands.

    Risks & headwinds

    4
    Moderated e.l.f. brand global consumption and slower spring innovationLast 12 weeks (ongoing)

    e.l.f. brand global consumption moderated from high single digits in FY26 to low single digits in the last 12 weeks.

    Mitigation: Targeted pricing actions (e.g., Halo Glow skin tint price reduction), fast-tracked innovation for fall, increased international marketing, key leadership changes.

    Higher investment in marketing, digital, team, and infrastructureQ4 FY26 (past), ongoing for FY27

    Q4 adjusted EBITDA $59 million vs $81 million YoY; Adjusted net income $19 million vs $45 million YoY. Marketing and digital investment 31% of net sales in Q4 vs 23% YoY.

    Mitigation: Strategic investments to drive future growth and unlock white space opportunities.

    Commodity and transportation cost inflation (Middle East conflict)FY27

    Estimated $15 million to $20 million of incremental cost headwinds in FY27 if oil prices remain around $100 per barrel.

    Mitigation: Cost savings initiatives, pursuing refund on IEEPA tariffs ($58.5 million).

    TariffsFY26 (past), FY27 (ongoing)

    Faced an average tariff rate of approximately 55% in FY26, more than double the 25% rate in FY25. FY27 outlook assumes 35% tariff rate.

    Mitigation: Pricing benefits, pursuing IEEPA tariff refunds.

    What to watch in Q1 FY27

    5

    e.l.f. brand unit velocity and consumption growth

    Next quarter (Q1 FY27)
    CurrentLow single digits (last 12 weeks)
    TargetReacceleration of unit growth

    Why it matters

    Core e.l.f. brand growth is essential for overall company performance, and management is implementing pricing and innovation actions to address recent moderation.

    e.l.f. brands global consumption has moderated from high single digits in fiscal '26 to low single digits in the last 12 weeks. Our spring 2026 innovation is off to a slower start than we expected. And as a result, we're not seeing the lift across our core items that spring innovation has historically delivered.

    Q&A highlights

    6

    Why was spring innovation slow, what's planned for fall, what prestige trends are inspiring them, and how are adjacent categories developing?

    Spring innovation was below internal expectations but still strong relative to the category. Fall innovation is planned, and additional fast-tracked innovation will be in market before holidays. Prestige inspiration is broad and not dependent on a single season. Adjacent categories like fragrance (H&M) and hair care (Power Grip) showed good signals, but the primary focus remains on color cosmetics and skin care due to significant white space.

    “this is really relative to our own expectations in terms of the offtake that we're expecting and what that does to our overall core.”

    asked by Sydney Wagner · answered by Tarang Amin

    2 min read6 chapters

    Detailed Narrative

    01

    Brand Portfolio Strength and Diversification

    e.l.f. Beauty highlighted its strong portfolio with 4 brands surpassing $200 million in retail sales, each built on value, innovation, and disruptive marketing. Acquisitions of Rhode and Naturium have significantly diversified the business, increasing non-e.l.f. brand sales from 0% to 30% of global consumption and skin care from 9% to 23%. Manufacturing outside China also increased from 1% to over 45% of production, enhancing supply chain resilience.

    02

    e.l.f. Brand Performance and Strategic Actions

    While e.l.f. Cosmetics delivered approximately $1.8 billion in global retail sales and gained 115 basis points of U.S. market share in FY26, its global consumption moderated to low single digits in the last 12 weeks due to slower spring innovation. Management is addressing this with targeted pricing adjustments, such as reducing e.l.f. Halo Glow skin tint from $18 to $14, which resulted in a 38% unit lift on Amazon. Fast-tracked innovation for fall, increased international marketing, and key leadership changes are also underway to reaccelerate unit growth.

    03

    Rhode and Naturium Outperformance

    Rhode, acquired last August, exceeded expectations with over $500 million in global retail sales and approximately $390 million in net sales in FY26, growing over 80% year-over-year. It achieved the #1 beauty brand ranking in Sephora North America and executed record-breaking launches internationally. Naturium delivered nearly $250 million in global retail sales, doubling its pre-acquisition levels, and was the fastest-growing among the top 50 skin care brands in Q4, demonstrating significant white space opportunity.

    04

    International Expansion and Market Opportunity

    International net sales grew 38% in FY26, now representing approximately 20% of total net sales, compared to legacy peers with over 70% international sales. The company launched in 8 international retail customers across 14 countries in FY26. Rhode is set to further expand its global presence by launching with Sephora in Europe across 19 countries in September, building on its record-breaking launch with MECCA in Australia and New Zealand.

    05

    Marketing and Innovation Engine

    e.l.f. Beauty continues to leverage its disruptive marketing engine, successfully expanding e.l.f.'s unaided awareness from 13% in 2020 to 45% in 2025. Experiential marketing initiatives, such as e.l.f. Cosmetics and Rhode's activations at Coachella and Stagecoach, combine with community-led innovation to drive cultural impact and deepen consumer connection. The company also successfully tested adjacent categories like fragrance and hair care, with the Power Grip styling collection selling out in 48 hours.

    06

    Leadership Changes and Portfolio Focus

    Key leadership changes were announced to sharpen focus on the e.l.f. brands, including Kory Marchisotto as President of e.l.f. Brands and Oshiya Savur as Chief Marketing Officer, e.l.f. Brands. Ekta Chopra was appointed Chief Technology and AI Officer to drive digital transformation. The company also decided to transfer the Keys Soulcare brand to Alicia Keys, allowing the team to concentrate on the five core brands that all demonstrated growth in FY26.

    AI-generated summary of the company’s earnings call. Not investment advice.