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e.l.f. Beauty, Inc. (ELF)·Q4 2025 Earnings Summary

Executive Summary

  • Q4 FY2025 net sales rose 4% to $332.6M and gross margin expanded ~50 bps to 71%; adjusted diluted EPS was $0.78 and adjusted EBITDA was $81.4M, marking the 25th consecutive quarter of net sales growth and market share gains .
  • Results beat Wall Street consensus on revenue and EPS: revenue $332.6M vs $326.7M consensus and adjusted diluted EPS $0.78 vs $0.72 consensus; note SPGI EBITDA consensus uses a standardized definition that differs from management’s adjusted EBITDA, showing a GAAP EBITDA miss while adjusted EBITDA rose 99% YoY (beat on revenue and EPS) [Q4 2025 estimates via S&P Global*].
  • Management withheld FY2026 guidance due to tariff uncertainty; announced a global $1 price increase effective Aug 1 and outlined mitigation across pricing, supply-chain diversification, and international growth .
  • Strategic catalyst: definitive agreement to acquire Rhode for $800M upfront plus up to $200M earn-out; expected accretive to growth and earnings and to close in Q2 FY2026 (portfolio expansion into prestige/Sephora) .

What Went Well and What Went Wrong

What Went Well

  • 25th consecutive quarter of net sales growth and share gains; U.S. share +190 bps YoY; international sales +60% in FY2025 supported by Germany (Rossmann) and new markets (sustained share momentum and expansion) .
  • Adjusted profitability stepped up: Q4 adjusted EPS $0.78 (+$0.25 YoY) and adjusted EBITDA $81.4M (24% margin), driven by net sales growth, gross margin expansion, and lower marketing intensity (strong margin leverage) .
  • Clear tariff mitigation: $1 global price increase effective Aug 1; supply-chain diversification (China sourcing down from ~100% in 2019 to ~75% today, trending lower), and faster-growing international mix (credible plan to defend margins) .
  • Quote: “We’re one of only six public consumer companies… that has grown for 25 straight quarters and averaged at least 20% sales growth per quarter… e.l.f. is the only cosmetics brand tracked by Nielsen to gain share for 25 consecutive quarters.” .

What Went Wrong

  • U.S. color cosmetics category softness and lapping last year’s outsized innovation weigh on near-term growth; Q4 U.S. net sales +1% YoY vs international +19% (U.S. growth slower than international) .
  • Tariff overhang: at a 55% import rate, gross COGS impact estimated at ~$50M annualized; some tariff headwinds begin to impact gross margin in Q1 FY2026 (guidance deferred, margin uncertainty) .
  • SPGI’s standardized EBITDA showed a miss vs consensus in Q4 despite management’s adjusted EBITDA strength, highlighting definitional differences investors must reconcile (non-GAAP vs SPGI GAAP divergence) [Q4 2025 estimates via S&P Global*] .

Financial Results

Core P&L and Margins by Quarter (oldest → newest)

MetricQ2 FY2025 (Sep 30, 2024)Q3 FY2025 (Dec 31, 2024)Q4 FY2025 (Mar 31, 2025)
Net Sales ($USD Millions)$301.1 $355.3 $332.6
GAAP Diluted EPS ($USD)$0.33 $0.30 $0.49
Adjusted Diluted EPS ($USD)$0.77 $0.74 $0.78
Gross Margin (%)71% 71% 71%
Adjusted EBITDA ($USD Millions)$69.3 $68.7 $81.4

Notes:

  • Q4 vs Q3 sequential: net sales declined to $332.6M from $355.3M; adjusted EPS rose to $0.78 from $0.74; adjusted EBITDA increased to $81.4M from $68.7M .
  • Q4 vs prior year: net sales +4%; gross margin +~50 bps; adjusted EPS +$0.25 YoY .

Q4 FY2025 vs Wall Street Consensus (S&P Global)

MetricConsensusActualSurprise
Revenue ($USD Millions)$326.7*$332.6 +$5.9M (Beat)
Adjusted Diluted EPS ($USD)$0.72*$0.78 +$0.06 (Beat)
EBITDA ($USD Millions, SPGI std.)$74.2*$57.5*-$16.7M (Miss; definition differs from company’s adjusted EBITDA $81.4 )

Values with asterisk (*) retrieved from S&P Global.

Geography and Mix (Q4 FY2025)

MetricQ4 FY2025
U.S. Net Sales Growth YoY (%)+1%
International Net Sales Growth YoY (%)+19%
Unit Volume Contribution to Growth (ppt)+8 pts
Price/Product Mix Contribution (ppt)-4 pts

Selected KPIs (Q4 FY2025)

KPIQ4 FY2025
SG&A ($USD Millions)$192.7 (58% of net sales)
Adjusted SG&A ($USD Millions)$173.3 (52% of net sales)
Marketing & Digital Spend (% of net sales)23%
Adjusted EBITDA Margin (%)24%

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
FY2026 OutlookFY2026N/ANo guidance provided due to tariff uncertainty Maintained “no guide”
Gross Margin DriversFY2026N/ABenefits from pricing/cost savings/supplier concessions offset by tariff costs; tariff headwinds begin in Q1 New qualitative color
Marketing & Digital Investment (% of sales)FY2026~24–26% (FY2025 target) ~24–26% Maintained
Global Price IncreaseEffective Aug 1, 2025None$1 increase across all SKUs globally; extended to all brands Raised prices
Tariffs – Indicative ImpactOngoingN/A~$50M annualized COGS impact at 55% tariff scenario New disclosure
Rhode Acquisition TimingClose windowN/AExpected to close Q2 FY2026 New transaction timeline

Earnings Call Themes & Trends

TopicQ2 FY2025 (Nov 2024)Q3 FY2025 (Feb 2025)Q4 FY2025 (May 2025)Trend
Tariffs/MacroCalled out tariff playbook if needed (cost, FX, pricing); no FY2025 impact Lowered FY2025 outlook due to Jan softness; no tariff guidance No FY2026 guidance; $50M impact at 55% tariff; mitigation underway; Q1 headwinds begin Rising uncertainty; mitigation detailed
PricingInternational price moves supporting margin —$1 global price increase effective Aug 1; transparent with community Price action implemented
Supply ChainHigh productivity model and DC expansion Inventory build supports spring innovation; global distribution capacity China sourcing ~75% and diversifying further by FY2026 Diversifying sourcing
International ExpansionRossmann Germany launch; Sephora Mexico #1 brand Continued momentum; FY2025 outlook embeds international Kruidvat NL/BE launch; Rossmann Poland; strong international growth Accelerating footprint
Product Performance6 of top 10 new items in mass; Halo Glow/Power Grip strength Lapping outsized lip oils; newness strong Glow Reviver Melting Lip Balms early success; Halo Glow campaign lift Innovation cadence restored
ERP/TechnologySAP go-live planned spring 2025; risk mitigation via testing —Annualizing SAP investments in FY2026 SG&A Execution underway
Retail Shelf SpaceGains at Target/Walgreens; entering Dollar General Gains continued; pipeline embedded Dollar General performing well; further space opportunities across retailers Expanding space
Regulatory/LegalShort-seller rebuttal and various legal notices (press releases) ——Background noise
M&A/PortfolioNaturium performing; complementary skincare —Rhode acquisition; accretive; Sephora rollout Portfolio broadening

Management Commentary

  • “We grew net sales 28% and adjusted EBITDA by 26% in fiscal 2025, and gained 190 bps of share in the U.S.; Q4 marked our 25th consecutive quarter of net sales growth and market share gains.” .
  • “To partially mitigate tariffs, we plan to take a dollar increase on our entire product assortment globally effective August 1… We are intentional in not going beyond that $1 to preserve our value proposition.” .
  • “If tariffs remain at the incremental 30% level to 55% total, we estimate the gross impact to COGS to be approximately $50 million annualized.” .
  • “In Q1 to date, our consumption trends are better than what we saw in Q4 and trending well ahead of the category.” .
  • On Rhode: “The upfront purchase price of $800 million represents ~3.8x LTM net sales ($212M); we expect Rhode to be accretive to top-line growth, adjusted EBITDA margins, and earnings.” .

Q&A Highlights

  • Near-term trends and tariffs: Q1 consumption stronger than Q4; tariff headwinds start in Q1; gross margin offsets via pricing/cost/supplier concessions; FY2026 outlook withheld until tariff clarity .
  • Pricing elasticity: $1 global price increase across all brands effective Aug 1; retailers supportive; community sentiment ~99% positive per management .
  • International and shelf space: Continued gains in Target/Walmart/Drug; new launches in Kruidvat NL/BE and Rossmann Poland; international growth likely to remain outsized through 1H FY2026 .
  • Rhode synergies: Accretive, DTC-to-retail expansion via Sephora; organizational capabilities in marketing, retail, and innovation to scale the brand; supply base capacity in Italy/South Korea .

Estimates Context

  • Q4 FY2025 revenue beat: $332.6M actual vs $326.7M consensus (+$5.9M) .
  • Q4 FY2025 adjusted diluted EPS beat: $0.78 actual vs $0.72 consensus (+$0.06) .
  • SPGI standardized EBITDA: $57.5M actual vs $74.2M consensus (miss), while company-reported adjusted EBITDA was $81.4M (+99% YoY), highlighting definitional differences (investors should align GAAP vs non-GAAP) [Q4 2025 estimates via S&P Global*] .

Values with asterisk (*) retrieved from S&P Global.

Key Takeaways for Investors

  • Beat-and-raise quality in Q4 on revenue and adjusted EPS despite U.S. category softness; margin leverage evident from normalized marketing intensity and gross margin strength .
  • Tariff overhang is the key variable for FY2026 modeling; management’s mitigation playbook (pricing, sourcing diversification, supplier concessions, international mix) should cushion margin risk as price actions take effect in Q2 FY2026 .
  • Expect near-term sequential noise (Q1 tariff headwind; Aug price increase timing) but ongoing share gains and international expansion support top-line resilience .
  • Rhode acquisition is a medium-term growth and margin tailwind with credible Sephora rollout and accretive profile; closing in Q2 FY2026 provides an additional catalyst .
  • Focus modeling on adjusted metrics (EPS, EBITDA) and marketing spend at ~24–26% of sales; reconcile SPGI standardized EBITDA vs company’s adjusted EBITDA when assessing “beats/misses” .
  • Watch innovation cadence (Glow Reviver, Halo Glow franchise) and shelf-space wins across U.S. retailers and Europe as key drivers of consumption outperformance .

Appendix: Additional Data and Sources

  • FY2025 liquidity: cash $148.7M; total debt $256.7M; net debt/adjusted EBITDA <1x; refinanced into $500M revolver with ~$243M availability .
  • Cash flow: FY2025 operating cash flow $133.8M; capex $18.5M .
  • Rhode transaction details: $800M at closing ($600M cash, $200M stock ~2.6M shares), up to $200M earn-out over three years; expected Q2 FY2026 close .

Sources: Q4 FY2025 press release and exhibits ; Q4 FY2025 earnings call transcript ; Q3 FY2025 press release ; Q2 FY2025 press release and transcript ; Rhode acquisition press release . Values marked * retrieved from S&P Global.