Asked why the guidance raise was not higher given Q1 beat and momentum, and about the strategy for the e.l.f. Hair category, including shelving and breakout potential.

Mandy defended the "very strong raise" for FY27 net sales and adjusted EBITDA, emphasizing the full reinvestment of tariff refunds over Q2-Q4. Tarang detailed e.l.f. Hair's strategic importance as a $17 billion category, its prestige-inspired value proposition, and exclusive launch with Target, similar to e.l.f. SKIN. “21% growth on adjusted EBITDA is our projection for the year, which we believe is quite strong.”

Asked about improvement in e.l.f. brand performance in international markets (U.K., Germany) and further clarification on pricing elasticity for the 10% of SKUs versus the rest.

Tarang confirmed meaningful improvement in U.K. and Germany due to increased marketing and new retail partnerships (Boots, DM), and excitement for Brazil launch. Mandy clarified that only 10% of SKUs showed sufficient unit elasticity to justify permanent lower pricing, with the rest returning to original prices. “We've now introduced the brand with DM in Germany, and we've seen a major turn in that market to a very strong positive growth.”

Inquired about the channel strategy and expansion roadmap for e.l.f. Hair, and whether tariff reinvestments would become a headwind in FY28.

Tarang stated e.l.f. Hair is shelved in the haircare aisle and is exclusive with Target for FY27, with future expansion planned similar to e.l.f. SKIN. Mandy confirmed the reinvestment is a one-time use of a one-time inflow, and while FY28 will be addressed later, the company has a strong track record of EBITDA growth. “For this fiscal year, it will be a Target exclusive, and we'll continue to nurture the brand with them.”

ELF

e.l.f. Beauty (ELF) Q1 FY27 earnings call: guidance and Q&A

Earnings call· Jun 2026 (Q1 FY27)· Consumer Staples· Aug 5, 2026

Source: earnings call transcript

Executive summary

e.l.f. Beauty Q1 FY27 — Strong Sales Growth and Raised Outlook Driven by Portfolio Strength

e.l.f. Beauty delivered another quarter of industry-leading growth, driven by its diversified portfolio of brands and strategic investments. The company raised its full-year outlook, reflecting confidence in its core e.l.f. brand actions and the continued momentum of Naturium and rhode. Strategic reinvestment of tariff refunds is planned to fuel marketing and maintain value proposition, positioning the company for sustained long-term growth.

Highlights

Net sales grew 36% in Q1 FY27, marking the 30th consecutive quarter of net sales growth.
Raised FY27 net sales growth outlook to 18%-20% from 12%-14% previously.
Q1 gross margin increased 1,400 bps to 83%, including a 1,050 bps benefit from IEEPA tariff refunds.
Adjusted EBITDA grew 93% to $168 million in Q1 FY27.
rhode contributed approximately $160 million in net sales in Q1, with a single-day DTC sales record of $27 million.

Concerns

Unit volumes were down approximately 3 percentage points in Q1 FY27.
Adjusted SG&A as a percentage of sales increased to 54% in Q1 FY27 from 50% in Q1 FY26 due to investments.
Marketing and digital investment was below expectations in Q1 FY27 due to timing of spend.

Guidance & targets

Category	Target	Timeline	Confidence
Net sales growth	18% to 20% high materiality	FY27	High
Adjusted EBITDA	$401 million to $407 million high materiality	FY27	High
Adjusted Net Income	$212 million to $215 million medium materiality	FY27	High
Adjusted EPS	$3.50 to $3.55 per diluted share high materiality	FY27	High
Adjusted tax rate	approximately 25% to 26% low materiality	FY27	High
Fully diluted average share count	approximately 60.5 million shares low materiality	FY27	High
rhode contribution to net sales growth	approximately 13 percentage points medium materiality	FY27	High
Organic net sales growth	6% to 7% high materiality	FY27	High
Organic net sales growth	10% to 12% high materiality	balance of FY27	High
Total net sales growth	mid-30s medium materiality	Q2 · FY27	High
Gross margin	up approximately 200 basis points year-over-year high materiality	FY27	High
Gross margin ex-tariff refunds	approximately flat gross margin year-over-year medium materiality	FY27	High
Marketing and digital spend as % of net sales	high end of our previous 23% to 25% range medium materiality	FY27	High
Adjusted EBITDA margins	mid-teens medium materiality	balance of FY27	High
Adjusted EBITDA margins	approximately 21% medium materiality	FY27	High

Segment performance

Segment	Revenue	YoY	QoQ	Margin
U.S. U.S. net sales grew 29% in Q1.	—	29%	—	—
International international net sales grew 61%.	—	61%	—	—

Product announcements

Product	Type	Timeline
e.l.f. Hair	launch	June
e.l.f. SKIN at Dollar General	expansion	this fall
e.l.f. with Sephora in Brazil	launch	this fall
Naturium with Sephora in Canada and Mexico	launch	this fall
rhode with Sephora in Europe	launch	this September
e.l.f. expansion in Boots (U.K.)	expansion	this fall

Deals & partnerships

rhode Acquisition of breakthrough beauty brand

It's now been about a year since it was acquired. Rhode very much fits the culture of e.l.f. from the team all the way to our approach in terms of how we engage consumers, including the strength of innovation.

Boots (U.K.) Expanding e.l.f. brand presence

Expanding our presence in Boots, the U.K.'s leading destination for beauty in the fall of this year.

Sephora (Brazil) Launching e.l.f. brand

Launch e.l.f. with Sephora in Brazil, the world's third largest cosmetics market.

Dollar General Launching e.l.f. SKIN

Launch e.l.f. SKIN at Dollar General, meaningfully expanding our reach.

Sephora (Canada and Mexico) Launching Naturium

Naturium will be launching with Sephora in Canada and Mexico this fall.

Sephora (Europe) Launching rhode

Launch rhode this September with Sephora in Europe across 19 countries.

Target Exclusive launch of e.l.f. Hair through this fiscal year

Exclusive nationwide launch with Target for e.l.f. Hair. Will be a Target exclusive for this fiscal year.

Risks & headwinds

Unit volume degradation due to prior pricing actions Q1 FY27

unit volumes were down approximately 3 percentage points

Mitigation:price discovery test leading to maintaining lower prices on 10% of SKUs to drive unit momentum.

Higher freight costs FY27

higher freight costs

Mitigation:already baked into our outlook

Timing of marketing spend Q1 FY27

Marketing and digital investment for the quarter was 22% of net sales, below our expectations due to timing of spend

Mitigation:As we look to the balance of the year, marketing and digital is planned to track ahead of that range given the underspend in Q1.

What to watch in Q2 FY27

e.l.f. brand unit momentum

Next quarter (Q2 FY27)

Current unit volumes were down approximately 3 percentage points

Target Improvement in unit volumes following pricing adjustments

Why it matters

Verifies the effectiveness of the pricing strategy to drive unit growth and reinforce value proposition.

We did identify about 10% of our SKUs where we believe we can drive units by maintaining lower prices. The remaining SKUs will return to their pretest prices over the next couple of weeks.

Find out whether ELF delivers this. Inve re-checks your case every morning.

Q&A highlights

Inquired about the impact of pricing adjustments on unit momentum and margin, and the capabilities rhode brought to e.l.f. and vice versa, along with future geographic expansion pace for rhode.

Tarang explained that 10% of SKUs will maintain lower prices due to significant unit momentum, while 90% were appropriately priced. He highlighted rhode's tremendous growth, its cultural fit, and e.l.f.'s capabilities in distribution and team building supporting rhode's expansion, particularly into Sephora Europe. Mandy added details on new shelf space for e.l.f., Naturium, and rhode.

“Rhode did in day more than what 98% of those brands do in an entire year.”

asked by Olivia Tong Cheang · answered by Tarang Amin

2 min read 6 chapters

Detailed narrative

Consistent Industry-Leading Growth

e.l.f. Beauty achieved its 30th consecutive quarter of net sales growth, with Q1 FY27 net sales up 36%. The company is one of only six public consumer companies to maintain this growth streak while averaging at least 20% net sales growth per quarter, demonstrating the strength of its strategy and brand portfolio.

Strategic Brand Diversification

The company is scaling towards $2 billion in net sales, with non-e.l.f. sales growing from less than 1% to over 30% and skin care from 10% to nearly 25% of total sales over the past three years. Digital penetration also increased from 18% to 30%, indicating successful diversification across brands, categories, and channels.

e.l.f. Brand Reinforcement

Management is taking targeted actions to strengthen the e.l.f. brand, focusing on value proposition, innovation, marketing, international expansion, and category adjacencies. A price discovery test confirmed 90% of SKUs are appropriately priced, while 10% will maintain lower prices to drive unit momentum, reinforcing the brand's value.

rhode's Exceptional Performance

rhode continues its outstanding growth, contributing approximately $160 million in net sales in Q1 FY27 and achieving record-breaking launches globally. A single-day DTC sales event generated $27 million, acquiring 90,000 new consumers and demonstrating strong repeat purchases, with a major expansion into Sephora Europe across 19 countries planned.

Supply Chain Diversification

The company has significantly diversified its supply chain, with production outside of China expected to reach approximately 60% by the end of FY27, up from 1% a few years ago. This enhances supply chain robustness to meet global demand while maintaining quality, cost, and speed.

Reinvestment of Tariff Refunds

The $50 million IEEPA tariff refunds received in Q1 FY27 will be fully reinvested over the balance of the fiscal year. This reinvestment will primarily fund increased marketing across brands and support pricing actions on a subset of the portfolio, aiming to strengthen competitive positioning and drive long-term growth.

Summary of the company's earnings call; see how call summaries are prepared. Not investment advice.