e.l.f. Beauty — Q1 Fiscal 2027 Earnings Summary

Financial Performance

• Net sales increased 36% year-over-year to $479.4 million for the three months ended June 30, 2026.
• Gross margin increased approximately 1,400 basis points to 83%, including a 1,050 basis point benefit from IEEPA tariff refunds, with the remainder driven by pricing and lower year-over-year tariff rates.
• Selling, general and administrative (SG&A) expenses increased $84.5 million to $280.3 million; adjusted SG&A increased $83.4 million to $260.7 million, driven by higher marketing, merchandising, distribution, compensation, and depreciation costs.
• Net income was $66.6 million on a GAAP basis, compared to $33.3 million in the prior year period.
• Adjusted net income was $104.6 million, compared to $51.3 million in the prior year period.
• Diluted earnings per share (EPS) were $1.12 on a GAAP basis and $1.75 on an adjusted basis, compared to $0.58 and $0.89 respectively in the prior year.
• Adjusted EBITDA was $168.2 million (35% of net sales), up 93% year-over-year from $87.1 million.
• Cash and cash equivalents increased to $344.2 million as of June 30, 2026, from $170.0 million in the prior year.
• Total debt increased to $834.2 million as of June 30, 2026, from $256.7 million in the prior year.
• Net cash provided by operating activities was $111.7 million for the quarter, compared to $27.2 million in the prior year.
• Net cash used in investing activities was $1.7 million, compared to $7.6 million in the prior year.
• Net cash used in financing activities was $55.5 million, primarily driven by $49.9 million in stock repurchases and $7.5 million in debt repayments.

Guidance and Future Outlook

• Raised fiscal 2027 net sales growth outlook to 18-20% year-over-year, up from the previous 12-14% range.
• Updated fiscal 2027 net sales guidance increased to $1,938-$1,968 million from $1,835-$1,865 million.
• Updated fiscal 2027 adjusted EBITDA guidance increased to $401-$407 million from $379-$385 million.
• Updated fiscal 2027 adjusted net income guidance increased to $212-$215 million from $198-$201 million.
• Updated fiscal 2027 adjusted diluted EPS guidance increased to $3.50-$3.55 from $3.27-$3.32.
• Fiscal 2027 adjusted effective tax rate guidance remains unchanged at 25-26%.
• Fiscal 2027 weighted average diluted shares outstanding guidance remains unchanged at 60.5 million.

Business Segments and Product Lines

• Strong performance was reported across both retailer and e-commerce channels in the US and internationally.
• The company achieved its 30th consecutive quarter of net sales growth.
• The portfolio includes e.l.f. Cosmetics, e.l.f. SKIN, e.l.f. Hair, rhode, Naturium, and Well People.
• Rhode acquisition results outperformed revenue earnout thresholds, resulting in a $16.1 million fair value adjustment recorded in the quarter.

Market and Competitive Landscape

• Management described the results as "industry-leading" and attributed growth to the strength of the team, strategy, and brand portfolio.
• The company noted consistent, category-leading growth over seven continuous years.

Risks and Challenges

• Forward-looking statements cite risks including the ability to effectively compete, successfully introduce new products, attract new retail customers, and optimize shelf space.
• Risks include the potential loss of key retail customers or declines in their general business performance.
• Business disruptions resulting from acquisitions, such as the rhode acquisition, are noted as potential risks.
• The ability to effectively manage SG&A and other expenses is identified as a key risk factor.
• Foreign currency rate fluctuations impacted other income/expense, changing from $5.0 million income to $0.3 million expense year-over-year.

Management Commentary and Tone

• Tarang Amin, Chairman and CEO, expressed pride in the team for achieving another quarter of industry-leading results.
• Management highlighted the momentum driving the decision to raise the fiscal 2027 outlook.
• The tone is confident, emphasizing the strength of the strategy and portfolio.

Other Key Points

• The company repurchased $49.982 million of common stock during the quarter.
• The company repaid $7.5 million in long-term debt during the quarter.
• The company recorded a $16.1 million expense related to the change in fair value of contingent consideration for the rhode acquisition.
• The company donates 2% of net profits to organizations making positive impacts.
• The company is the first beauty company with Fair Trade Certified™ facilities and offers products double-certified by PETA and Leaping Bunny as cruelty-free.
• A webcast to discuss results was held on August 5, 2026, at 4:30 p.m. Eastern Time.