e.l.f. Beauty — Second Quarter Fiscal 2027 Earnings Summary

Financial Performance

• Net sales for the three months ended September 30, 2026, increased 51% year-over-year to $520.8 million; for the six months ended September 30, 2026, net sales increased 43% year-over-year to $1,000.2 million.
• Gross margin for the three-month period increased approximately 160 basis points to 71%, including a 30 basis point benefit from IEEPA tariff refunds; for the six-month period, gross margin increased approximately 760 basis points to 77%, including a 520 basis point benefit from IEEPA tariff refunds.
• Selling, general and administrative (SG&A) expenses increased $69.0 million to $300.1 million for the three months and $153.5 million to $580.4 million for the six months, driven by marketing, merchandising, distribution, compensation, and depreciation/amortization.
• Adjusted SG&A increased $81.9 million to $275.1 million for the three months and $165.2 million to $535.8 million for the six months.
• GAAP net income was $30.0 million for the three months and $96.6 million for the six months; adjusted net income was $72.7 million for the three months and $177.2 million for the six months.
• Diluted earnings per share (GAAP) were $0.50 for the three months and $1.61 for the six months; adjusted diluted EPS were $1.21 for the three months and $2.96 for the six months.
• Adjusted EBITDA was $123.4 million (24% of net sales), up 86% year-over-year for the three months, and $291.6 million (29% of net sales), up 90% year-over-year for the six months.
• Cash and cash equivalents increased to $350.8 million as of September 30, 2026, from $194.4 million as of September 30, 2025; total debt decreased to $826.7 million from $856.7 million over the same period.
• A $17.7 million fair value adjustment related to the rhode acquisition contingent consideration was recorded for the three months, and a $33.8 million adjustment was recorded for the six months, driven by rhode's revenue outperformance.
• Other income (expense), net shifted from a $1.9 million expense to a $0.6 million income for the three months, and decreased from a $3.2 million gain to a $0.2 million gain for the six months, primarily due to foreign currency fluctuations.

Guidance and Future Outlook

• The company raised its full-year fiscal 2027 net sales guidance to a 22-24% year-over-year increase, up from the previous 18-20% expectation.
• Updated fiscal 2027 net sales guidance is now $2,003-$2,029 million, up from the previous $1,938-$1,968 million.
• Updated fiscal 2027 adjusted EBITDA guidance is now $421-$427 million, up from the previous $401-$407 million.
• Updated fiscal 2027 adjusted net income guidance is now $231-$233 million, up from the previous $212-$215 million.
• Updated fiscal 2027 adjusted diluted earnings per share guidance is now $3.82-$3.86, up from the previous $3.50-$3.55.
• The adjusted effective tax rate guidance remains unchanged at 25-26%, and weighted average diluted shares outstanding remains at 60.5 million.

Business Segments and Product Lines

• Net sales growth was driven by strong performance across both retailer and e-commerce channels in the US and internationally.
• The company reported its 31st 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.
• The acquisition of rhode is a key component of the portfolio, with its revenue results directly impacting contingent consideration adjustments.

Market and Competitive Landscape

• Management attributed growth to deep engagement with the community and democratizing access to beauty products.
• The company noted benefits from a favorable product mix and lower year-over-year tariffs, partially offset by price investments.
• The press release mentions the company's ability to effectively compete with other beauty companies as a factor that could cause actual results to differ from expectations.

Risks and Challenges

• Risks include the company's ability to effectively compete, successfully introduce new products, attract new retail customers, optimize shelf space, and manage SG&A expenses.
• Potential disruptions from acquisitions, such as the rhode acquisition, are cited as a risk.
• The loss of key retail customers or declines in their general business performance could impact results.
• Forward-looking statements note that actual results may differ due to risks and uncertainties described in the company's Form 10-K.

Management Commentary and Tone

• Chairman and CEO Tarang Amin expressed pride in the team's delivery of 31 consecutive quarters of net sales growth.
• Management stated that the consistency of results is powered by a "passionate team of owners," deep community engagement, and the mission to democratize access to beauty.
• The tone is confident, citing momentum as the driver for raising the full-year outlook.

Other Key Points

• The company is a different kind of company with a mission to make the best of beauty accessible to every eye, lip, and face.
• e.l.f. Beauty is the first beauty company with Fair Trade Certified™ facilities and offers clean, vegan products double-certified by PETA and Leaping Bunny as cruelty-free.
• The company donates 2% of net profits to organizations that make positive impacts.
• A webcast to discuss the results was held on November 4, 2026, at 4:30 p.m. Eastern Time.
• The company recorded a loss on extinguishment of debt of $674,000 in the prior year period (six months ended September 30, 2025), but none in the current period.
• Stock-based compensation was $24.6 million for the three months and $44.3 million for the six months.
• Depreciation and amortization was $24.1 million for the three months and $50.2 million for the six months.