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    ELF
    Earnings call· Jun 2026(Q1 FY27)

    e.l.f. Beauty Q1 FY27 earnings call ELF

    Aug 5, 2026 Source

    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

    5

    • 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

    3

    • 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

    15
    CategoryTargetConfidence
    Net sales growth
    18% to 20%
    high materiality
    High
    Adjusted EBITDA
    $401 million to $407 million
    high materiality
    High
    Adjusted Net Income
    $212 million to $215 million
    medium materiality
    High
    Adjusted EPS
    $3.50 to $3.55 per diluted share
    high materiality
    High
    Adjusted tax rate
    approximately 25% to 26%
    low materiality
    High
    Fully diluted average share count
    approximately 60.5 million shares
    low materiality
    High
    rhode contribution to net sales growth
    approximately 13 percentage points
    medium materiality
    High
    Organic net sales growth
    6% to 7%
    high materiality
    High
    Organic net sales growth
    10% to 12%
    high materiality
    High
    Total net sales growth
    mid-30s
    medium materiality
    High
    Gross margin
    up approximately 200 basis points year-over-year
    high materiality
    High
    Gross margin ex-tariff refunds
    approximately flat gross margin year-over-year
    medium materiality
    High
    Marketing and digital spend as % of net sales
    high end of our previous 23% to 25% range
    medium materiality
    High
    Adjusted EBITDA margins
    mid-teens
    medium materiality
    High
    Adjusted EBITDA margins
    approximately 21%
    medium materiality
    High

    Segment performance

    2
    SegmentRevenueYoYQoQMargin
    U.S.
    U.S. net sales grew 29% in Q1.
    		—29%——
    International
    international net sales grew 61%.
    		—61%——

    Operational metrics

    35
    Net sales growth
    36%YoY
    Q1 FY27

    30th consecutive quarter of net sales growth.

    Non-e.l.f. sales as % of total
    over 30%from less than 1%
    past 3 years

    Over the past 3 years, we've grown non- e.l.f. sales from less than 1% to over 30%.

    Skin care as % of total sales
    nearly 25%from 10%
    past 3 years

    Skin care from 10% to nearly 25%.

    Digital penetration
    30%from 18%
    past 3 years

    digital penetration from 18% to 30%.

    Production outside China
    around 60%from 1% a few years ago
    end of FY27

    By the end of this fiscal year, we expect to be around 60%.

    e.l.f. Cosmetics average price point
    about $7
    current

    The average price point for e.l.f. Cosmetics is about $7 as compared to over $10 for legacy mass brands and over $30 for prestige brands.

    e.l.f. Cosmetics unaided awareness
    45%from 13% in a few years
    current

    growing e.l.f.'s unaided awareness from 13% to 45% in just a few years

    e.l.f. Cosmetics U.S. household penetration
    approximately 1 in 3 women
    current

    Today, e.l.f. Cosmetics is purchased by approximately 1 in 3 women in the U.S.

    e.l.f. SKIN mass skin care brand ranking
    #11from #25 a few years ago
    current

    In just a few years, e.l.f. SKIN has risen to the #11 mass skin care brand in the U.S.

    e.l.f. SKIN mass skin care category share
    2%
    current

    Yet we hold only a 2% share of the mass skin care category compared to the #1 brand at 13%.

    Haircare category size
    $17 billion
    current

    Haircare is an approximately $17 billion category in the U.S.

    e.l.f. Hair purchasers new to e.l.f. brand
    nearly half
    early results

    with nearly half of e.l.f. Hair purchasers new to the e.l.f. brand.

    rhode net sales contribution
    approximately $160 million
    Q1 FY27

    Rhode outperformed our expectations in the quarter, contributing approximately $160 million in net sales.

    rhode DTC sales
    $27 million
    single day

    Rhode's latest summer product launch drove $27 million of DTC sales in a single day.

    rhode new consumers
    90,000
    single day

    We acquired 90,000 new consumers that day.

    rhode repeat purchases
    over 70%
    single day

    while also seeing strong repeat purchases with over 70% of sales coming from existing consumers.

    Pricing and product mix contribution to net sales growth
    39 percentage points
    Q1 FY27

    Pricing and product mix added approximately 39 percentage points to net sales growth in Q1.

    Unit volumes growth
    down approximately 3 percentage points
    Q1 FY27

    while unit volumes were down approximately 3 percentage points.

    Gross margin
    83%increased approximately 1,400 basis points compared to prior year
    Q1 FY27

    Q1 gross margin of 83% increased approximately 1,400 basis points compared to prior year.

    Gross margin increase from IEEPA tariff refunds
    1,050 basis points
    Q1 FY27

    Approximately 1,050 basis points of that increase was driven by $50 million of IEEPA tariff refunds received in the quarter and flowing into COGS.

    Gross margin increase ex-tariff refunds
    350 basis points
    Q1 FY27

    Excluding this benefit, gross margin was still meaningfully higher year-over-year, up about 350 basis points, reflecting benefits from pricing and lower year-over-year tariff rates.

    Adjusted SG&A as % of sales
    54%compared to 50% in Q1 last year
    Q1 FY27

    On an adjusted basis, SG&A as a percentage of sales was 54% in Q1 as compared to 50% in Q1 last year.

    Marketing and digital investment as % of net sales
    22%flat to last year
    Q1 FY27

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

    Adjusted EBITDA
    $168 millionup 93% as compared to $87 million in Q1 last year
    Q1 FY27

    Q1 adjusted EBITDA was $168 million, up 93% as compared to $87 million in Q1 last year.

    Adjusted EBITDA ex-tariff refunds
    up 36%YoY
    Q1 FY27

    Excluding the impact of tariff refunds, our adjusted EBITDA was up 36% year-over-year.

    Adjusted Net Income
    $105 millioncompared to $51 million a year ago
    Q1 FY27

    Adjusted net income in Q1 was $105 million or $1.75 per diluted share compared to $51 million or $0.89 per diluted share a year ago.

    Adjusted EPS
    $1.75compared to $0.89 per diluted share a year ago
    Q1 FY27

    Adjusted net income in Q1 was $105 million or $1.75 per diluted share compared to $51 million or $0.89 per diluted share a year ago.

    Impact of tariff refunds on Adjusted Net Income
    $40 million
    Q1 FY27

    The impact of tariff refunds was an approximately $40 million benefit to adjusted net income.

    Impact of tariff refunds on Adjusted EPS
    $0.68
    Q1 FY27

    or approximately $0.68 per diluted share.

    Cash on hand
    $344 millioncompared to $170 million a year ago
    Q1 FY27 end

    We ended Q1 with $344 million in cash on hand compared to a cash balance of $170 million a year ago.

    Cash on hand from tariff refunds
    $53 million
    Q1 FY27 end

    Note, our June ending cash balance included $53 million in tariff refunds, inclusive of interest we received in the quarter.

    Stock repurchases
    $50 million
    Q1 FY27

    In Q1, we repurchased approximately $50 million of our outstanding common stock.

    Net debt to adjusted EBITDA
    less than 1.5x
    Q1 FY27 end

    Our liquidity position remains strong with less than 1.5x net debt to adjusted EBITDA.

    IEEPA tariff refunds received
    $50 million
    Q1 FY27

    In Q1, we received approximately $50 million of IEEPA tariff refunds.

    e.l.f. brand market share gain
    60 basis pointsgain
    last year

    we picked up 60 basis points of market share. It's the most basis points of market share gain out of the top 10 brands.

    Industry KPIs

    8
    MetricValueDetails
    Channel mix30%%
    Category concentration4 brandsbrands
    Underlying sales growth36%%
    Power brands contribution4 brandsbrands
    Brand marketing investment22%% of net sales
    Market value share by geography60 basis pointsbps
    Developed vs emerging market split21%%
    Underlying operating margin bridge83%%

    Product announcements

    6
    ProductTypeDetails
    e.l.f. Hairlaunch
    e.l.f. SKIN at Dollar Generalexpansion
    e.l.f. with Sephora in Brazillaunch
    Naturium with Sephora in Canada and Mexicolaunch
    rhode with Sephora in Europelaunch
    e.l.f. expansion in Boots (U.K.)expansion

    Deals & partnerships

    7
    rhodeAcquisition 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 GeneralLaunching 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.

    TargetExclusive launch of e.l.f. Hairthrough this fiscal year

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

    Risks & headwinds

    3
    Unit volume degradation due to prior pricing actionsQ1 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 costsFY27

    higher freight costs

    Mitigation: already baked into our outlook

    Timing of marketing spendQ1 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

    5

    e.l.f. brand unit momentum

    Next quarter (Q2 FY27)
    Currentunit volumes were down approximately 3 percentage points
    TargetImprovement 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.

    Q&A highlights

    5

    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 read6 chapters

    Detailed Narrative

    01

    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.

    02

    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.

    03

    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.

    04

    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.

    05

    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.

    06

    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.

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