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e.l.f. Beauty, Inc. (ELF)·Q2 2026 Earnings Summary

Executive Summary

  • Q2 FY2026 delivered 14% net sales growth to $343.9M, gross margin of 69% (-165 bps YoY), adjusted EBITDA $66.2M (19% of sales, -4% YoY), and adjusted EPS $0.68; management highlighted 140 bps market share gains and a record-breaking rhode launch at Sephora North America .
  • vs. S&P Global consensus: adjusted EPS beat (actual $0.68 vs $0.57*), while revenue missed (actual $343.9M vs $365.7M*); 16 EPS and 15 revenue estimates contributed to consensus*.
  • Full-year FY2026 guidance introduced: net sales $1.55–$1.57B (+18–20% YoY), adjusted EBITDA $302–$306M, adjusted net income $165–$168M, adjusted EPS $2.80–$2.85, adjusted tax rate ~23%, diluted shares ~59M; H2 gross margin ~71%, H2 adjusted EBITDA margin ~17% on elevated marketing (27–29% of sales) .
  • Key catalyst: rhode’s biggest launch in Sephora North America history (2.5x prior record), with FY2026 contribution expected at ~$200M post-close and ~$300M annualized; shipments temporarily lagged consumption due to enforcing the August 1 price increase, now resolved .
  • Liquidity and leverage: cash $194.4M, long-term debt $831.6M; management cites <2x leverage after the rhode acquisition, with cash priorities on growth, SAP ERP transition, and global expansion .

Note: Values retrieved from S&P Global*

What Went Well and What Went Wrong

What Went Well

  • “27th consecutive quarter of net sales growth” with 140 bps market share gains for e.l.f. brand and a record-breaking rhode launch at Sephora North America .
  • “Pricing and product mix added ~21 points to net sales growth” with US net sales +18% YoY and strong consumption trends (e.l.f. brand +7% vs category +2%) .
  • “We remain confident in our strategy to grow market share and capitalize on the significant whitespace ahead of us,” and expect rhode to contribute ~$200M in FY2026, ~$300M annualized (40% YoY growth) .

What Went Wrong

  • Revenue missed consensus despite adjusted EPS beat (actual $343.9M vs $365.7M*), driven by shipments below consumption as e.l.f. enforced price sanctity after its August 1 portfolio-wide $1 increase; issue now resolved .
  • Gross margin down ~165 bps YoY to 69% on tariff headwinds; adjusted EBITDA down 4% YoY to $66.2M (19% margin) .
  • Elevated tariff backdrop (~60% average for FY2026 vs 25% last year, ~3,500 bps headwind), with H2 adjusted EBITDA margin guided to ~17% amid increased marketing intensity (27–29% of sales) despite anticipated H2 gross margin recovery to ~71% .

Note: Values retrieved from S&P Global*

Financial Results

MetricQ4 2025Q1 2026Q2 2026
Net Sales ($USD Millions)$332.6 $353.7 $343.9
GAAP Diluted EPS ($)$0.49 $0.58 $0.05
Adjusted Diluted EPS ($)$0.78 $0.89 $0.68
Gross Margin (%)71% 69% 69%
SG&A (% of Net Sales, GAAP)58% 55% 67%
SG&A (% of Net Sales, Adjusted)52% 50% 56%
Operating Income ($USD Millions)$44.3 $48.7 $7.7
Adjusted EBITDA ($USD Millions)$81.4 $87.1 $66.2
Adjusted EBITDA Margin (%)24% 25% 19%

vs. Wall Street consensus (S&P Global) – Q2 FY2026:

MetricConsensusActual
Revenue ($USD Millions)$365.7*$343.9
Primary EPS ($)$0.57*$0.68
# of EPS Estimates16*—
# of Revenue Estimates15*—

Note: Values retrieved from S&P Global*

Segment/Geography trends:

Region MetricQ1 2026Q2 2026
U.S. Net Sales Growth (YoY)+5% +18%
International Net Sales Growth (YoY)+30% +2% (lapping Rossmann Germany launch)

Selected KPIs:

KPIQ1 2026Q2 2026
Market Share Gains (bps)+210 bps +140 bps
Category Growth (U.S. mass cosmetics/skin)~2% YoY ~2% YoY
e.l.f. Brand Consumption Growth—+7% YoY
Marketing & Digital Spend (% of Sales)22% 23%

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Net SalesFY2026Not provided due to tariff uncertainty $1.55–$1.57B (+18–20% YoY) Introduced (Raised vs none)
Adjusted EBITDAFY2026Not provided $302–$306M Introduced
Adjusted Net IncomeFY2026Not provided $165–$168M Introduced
Adjusted EPSFY2026Not provided $2.80–$2.85 Introduced
Adjusted Tax RateFY2026—~23% Introduced
Diluted SharesFY2026—~59M Introduced
Net Sales GrowthH2 FY2026—+24–27% YoY (22 pts from rhode; organic +2–5%) Introduced
Gross MarginH2 FY2026—~71% (up ~200 bps seq from H1) Introduced
Adjusted EBITDA MarginH2 FY2026—~17% (vs ~22% in H1) Introduced
Marketing & Digital SpendH2 FY2026—27–29% of net sales (full-year 24–26%) Elevated in H2
DividendsFY2026None disclosedNone disclosedNo change

Earnings Call Themes & Trends

TopicPrevious Mentions (Q4 FY2025)Previous Mentions (Q1 FY2026)Current Period (Q2 FY2026)Trend
Tariffs & Mitigation50 bps GM uplift YoY in Q4; no FY26 guide due to tariff uncertainty Tariffs at 170% (Apr 9–May 13), then 55%; waiting for clarity; mitigation via pricing, supply chain, diversification Avg ~60% tariff for FY2026 (~3,500 bps headwind); now 45% as of Nov; H2 GM ~71% Improving rates, still volatile
Pricing/Shipments—Portfolio-wide $1 increase effective Aug 1; value proposition maintained Enforced price sanctity (paused shipments until correct POs); shipments below consumption; now resolved Short-term disruption resolved
rhodeAgreement announced (May 28) Closed Aug 5; Sephora US/CA launch in Sept; UK by year-end Biggest Sephora NA launch ever (2.5x prior), FY26 ~$200M contribution; ~$300M annualized Major growth driver
International ExpansionContinued expansion; strength across markets +30% international growth; launches: Kruidvat NL/BE; upcoming Rossmann Poland, Sephora GCC; Naturium to Sephora AU Q2 international +2% YoY (laps Rossmann DE); further launches planned (Sephora GCC, DM Germany, Sephora UK for rhode) Mixed near term, strong pipeline
Technology/ERP—SAP go-live in July; successful early days First full quarter close on SAP; smooth transition Execution on plan
Marketing IntensityLower in Q4; Adjusted SG&A down 22% in Q1; full-year target 24–26% H2 27–29% (timing shift); full-year 24–26% Elevated H2
Category & Brand KPIsCategory resilient; market share gains e.l.f. #1 teen makeup brand, broad demographic appeal; strong awareness e.l.f. brand consumption +7%; 140 bps share gains; Power Grip leadership; Mega viral on TikTok Shop Continued outperformance

Management Commentary

  • Tarang Amin (CEO): “We grew net sales 14% and delivered $66 million in adjusted EBITDA… Q2 marked our 27th consecutive quarter of net sales growth… We remain confident in our strategy to grow market share and capitalize on the white space ahead of us” .
  • Mandy Fields (CFO): “Pricing and product mix added approximately 21 points to net sales growth, partially offset by a 6 percentage point impact from lower unit volumes… We expect our gross margin in the second half to be approximately 71%… and marketing spend ~27–29% of net sales in the second half” .
  • Tarang Amin (on pricing discipline): “As soon as we do not see the right price on the PO, we do not fill that order… We have now… resolved it. We are shipping normally” .
  • Mandy Fields (tariff sensitivity): “We estimate every 10 percentage points of incremental tariffs results in a $17 million gross impact to our cost of goods sold on an annualized basis” .
  • Tarang Amin (rhode trajectory): “Rhode had the biggest launch in Sephora North America’s history, exceeding the previous record by 2.5 times” .

Q&A Highlights

  • Shipments vs. consumption: Management reiterated shipments temporarily lagged consumption due to enforcing the Aug 1 price increase; some catch-up expected in Q3, but not one-for-one; organic H2 net sales growth outlook +2–5% .
  • Tariffs/gross margin cadence: Average ~60% tariff headwind FY2026; H2 gross margin ~71% (flat YoY), full-year GM down ~100 bps; pricing and rhode mix support margins .
  • rhode accretion: Expected accretive to adjusted EBITDA margin; investing behind team and marketing while maintaining attractive gross margins even as mix shifts to wholesale .
  • Marketing intensity and SG&A: Full-year marketing still 24–26% of sales; H2 elevated due to timing; non-marketing SG&A leverage expected over time as infrastructure investments mature .
  • International growth: Near-term moderation (Q2 +2% YoY) due to lapping Rossmann Germany; pipeline robust across Sephora GCC, UK, DM Germany, and Naturium expansion .

Estimates Context

  • Q2 FY2026 results vs. S&P Global consensus: adjusted EPS beat ($0.68 vs $0.57*), revenue miss ($343.9M vs $365.7M*), with 16 EPS and 15 revenue estimates contributing to consensus*.
  • Implications: Estimate revisions likely to reflect stronger profitability mix from pricing and rhode, but near-term top-line modeling should incorporate shipment-consumption dynamics and lapping of prior-year space gains (Dollar General, Target) .

Note: Values retrieved from S&P Global*

Key Takeaways for Investors

  • Revenue miss vs. consensus tied to deliberate shipment discipline during the pricing reset; consumption trends and market share gains remain robust—monitor Q3 for partial shipment catch-up but not full normalization in a single quarter .
  • Profitability mix resilient: gross margin stabilizing; H2 guided to ~71% despite tariff headwinds; expect margin optics pressured by H2 marketing ramp (27–29% of sales) .
  • rhode is a material growth driver and brand equity asset (record Sephora launch), with ~$200M FY2026 contribution and ~$300M annualized; watch gross margin trajectory as the brand shifts to hybrid DTC/wholesale .
  • U.S. demand strong (+18% YoY); international growth near-term muted by tough comps (Rossmann Germany), but expansion pipeline (Sephora GCC/UK, DM Germany) supports medium-term growth .
  • Pricing strategy and price sanctity enforcement demonstrate e.l.f.’s brand/retailer discipline; average unit retail still compelling (75% portfolio ≤$10), preserving value advantage even post price increase .
  • Balance sheet supports strategy: cash $194.4M, leverage <2x post rhode; cap allocation focused on growth, SAP ERP, international scale .
  • Trading setup: Near-term stock reaction may hinge on revenue miss vs. strong EPS beat and new full-year guidance; medium-term thesis underpinned by category outperformance, brand momentum, and accretive portfolio expansion .

Appendix: Additional References

  • 8-K Q2 FY2026 + Exhibit 99.1 press release: financial statements, reconciliations, liquidity, FY2026 outlook .
  • Dedicated Q2 FY2026 press release: narrative and KPI highlights consistent with 8-K .
  • Q1 FY2026 materials: net sales $353.7M (+9% YoY), adjusted EPS $0.89, adjusted EBITDA $87.1M; half-year guide previously constrained by tariffs .
  • Q4 FY2025 press release: net sales $332.6M, GM 71%, adjusted EPS $0.78, adjusted EBITDA $81.4M; acquisition agreement for rhode announced .
  • Other Q2 FY2026 period press releases: brand/campaign activity (e.g., World Kindness Day “Sound of Kindness”) .