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 months ended September 30, 2026, increased approximately 160 basis points to 71%, including a 30 basis point benefit from IEEPA tariff refunds; for the six months ended September 30, 2026, 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 ended September 30, 2026, and increased $153.5 million to $580.4 million for the six months ended September 30, 2026.
• Adjusted SG&A increased $81.9 million to $275.1 million for the three months ended September 30, 2026, and increased $165.2 million to $535.8 million for the six months ended September 30, 2026.
• Net income was $30.0 million on a GAAP basis for the three months ended September 30, 2026, and $96.6 million for the six months ended September 30, 2026.
• Adjusted net income was $72.7 million for the three months ended September 30, 2026, and $177.2 million for the six months ended September 30, 2026.
• Diluted earnings per share (GAAP) were $0.50 for the three months ended September 30, 2026, and $1.61 for the six months ended September 30, 2026.
• Adjusted diluted earnings per share were $1.21 for the three months ended September 30, 2026, and $2.96 for the six months ended September 30, 2026.
• Adjusted EBITDA was $123.4 million (24% of net sales) for the three months ended September 30, 2026, up 86% year-over-year; for the six months ended September 30, 2026, Adjusted EBITDA was $291.6 million (29% of net sales), up 90% year-over-year.
• Cash and cash equivalents were $350.8 million as of September 30, 2026, compared to $194.4 million as of September 30, 2025.
• Total debt was $826.7 million as of September 30, 2026, compared to $856.7 million as of September 30, 2025.

Guidance and Future Outlook:

• The Company raised its full-year fiscal 2027 net sales guidance to a 22% to 24% year-over-year increase, previously expected to be 18% to 20%.
• Updated fiscal 2027 net sales guidance is $2,003 million to $2,029 million, compared to the previous guidance of $1,938 million to $1,968 million.
• Updated fiscal 2027 Adjusted EBITDA guidance is $421 million to $427 million, compared to the previous guidance of $401 million to $407 million.
• Updated fiscal 2027 Adjusted net income guidance is $231 million to $233 million, compared to the previous guidance of $212 million to $215 million.
• Updated fiscal 2027 Adjusted diluted earnings per share guidance is $3.82 to $3.86, compared to the previous guidance of $3.50 to $3.55.
• The Adjusted effective tax rate guidance remains unchanged at 25% to 26%.

Business Segments and Product Lines:

• Net sales growth was driven by strong performance in both retailer and e-commerce channels in the US and internationally.
• The Company reported 31 consecutive quarters of net sales growth.
• The portfolio includes brands e.l.f. Cosmetics, e.l.f. SKIN, e.l.f. Hair, rhode, Naturium, and Well People.
• The Company recorded a fair value adjustment of $17.7 million for the three months ended September 30, 2026, and $33.8 million for the six months ended September 30, 2026, related to the outperformance of the rhode acquisition revenue results relative to earnout thresholds.

Market and Competitive Landscape:

• The press release does not provide specific market share data or detailed competitor analysis.
• The Company notes its mission to democratize access to beauty and its status as the first beauty company with Fair Trade Certified facilities.

Risks and Challenges:

• Forward-looking statements note risks including the ability to effectively compete, successfully introduce new products, attract new retail customers, optimize shelf space, and manage SG&A expenses.
• Risks include potential loss of key retail customers or decline in their business performance.
• Risks include disruptions resulting from acquisitions, such as the rhode acquisition.
• Gross margin was partially offset by price investments and, in the three-month period, price investments.

Management Commentary and Tone:

• Chairman and CEO Tarang Amin expressed pride in the team for delivering 31 consecutive quarters of net sales growth.
• Management attributed consistency in results to the team's passion, deep community engagement, and the mission to democratize access to beauty.
• Management stated that gross margin increases were driven by lower year-over-year tariffs, favorable mix, and IEEPA tariff refunds, partially offset by price investments.
• SG&A increases were primarily related to increases in marketing, merchandising, distribution costs, compensation, benefits, and depreciation and amortization.

Other Key Points:

• The Company repurchased common stock for $49.982 million during the six months ended September 30, 2026.
• The Company recorded a change in fair value of contingent consideration related to the rhode acquisition, impacting both GAAP and non-GAAP financial measures.
• Other income (expense), net changed from a $1.9 million expense to $0.6 million income for the three months ended September 30, 2026, primarily due to foreign currency gains.
• Other income, net decreased by $2.9 million year-over-year for the six months ended September 30, 2026, from $3.2 million to $0.2 million.
• The Company donated 2% of net profits to organizations that make positive impacts.
• The Company holds PETA and Leaping Bunny certifications for cruelty-free products and offers clean and vegan products.