ELF — e.l.f. Beauty, Inc.

Summary of e.l.f. Beauty Q4 2026 Earnings Call

1. Key Financial Results and Metrics:

• Q4 Results:

  • Net sales grew 35% year-over-year, with the acquisition of Rhode contributing $113 million (34 percentage points).
  • Organic sales (excluding Rhode) increased approximately 1%.
  • U.S. net sales rose 26%, while international sales surged 75%.
  • Gross margin improved to 73%, up 140 basis points year-over-year.
  • Adjusted EBITDA was $59 million, down from $81 million in Q4 last year.
  • Adjusted net income was $19 million ($0.32 per diluted share), compared to $45 million ($0.78 per diluted share) a year ago.

• Full Year Results:

  • Fiscal 26 net sales grew 25%, adjusted EBITDA increased by 13%, with a 20% adjusted EBITDA margin.
  • Cash balance at year-end was $290 million, up from $149 million the previous year.

2. Strategic Updates and Business Highlights:

• e.l.f. Beauty achieved its seventh consecutive year of growth, with 29 consecutive quarters of net sales growth.
• The company has a strong brand portfolio, with e.l.f. Cosmetics generating approximately $1.8 billion in global retail sales and gaining significant market share.
• e.l.f. SKIN and Naturium also showed strong performance, with Naturium doubling its sales post-acquisition.
• The company is focusing on four key areas for growth: value, innovation, international expansion, and leadership changes.
• Notable marketing initiatives included successful activations at Coachella, enhancing brand visibility among younger demographics.

3. Forward Guidance and Outlook:

• For fiscal 27, e.l.f. expects net sales growth of approximately 12% to 14%, with adjusted EBITDA between $379 million to $385 million.
• Organic net sales growth is projected at 4% to 5%, with Rhode contributing approximately 9 percentage points to overall growth.
• The company anticipates flat gross margins year-over-year, with potential cost pressures from inflation and commodity prices.

4. Challenges and Points of Concern:

• The e.l.f. brand has experienced a slowdown in growth, with global consumption moderating from high single digits to low single digits recently.
• Spring 26 innovation underperformed expectations, impacting core item sales and overall brand momentum.
• The company faces significant tariff pressures, with an average tariff rate of approximately 55% impacting profitability.
• There are concerns about competitive pressures and the crowded marketplace affecting the e.l.f. brand's market share.

5. Notable Q&A Insights:

• Management acknowledged the need for improvement in the e.l.f. brand's performance and is taking action to enhance value and innovation.
• The company is exploring price adjustments to improve unit sales, with initial tests showing positive results.
• Rhode's growth is expected to continue strongly, especially with upcoming launches in Europe.
• The management emphasized the importance of maintaining marketing effectiveness while optimizing spend, with a focus on high ROI initiatives.
• There is confidence in the brand's ability to capture market share despite recent challenges, supported by ongoing consumer engagement and marketing efforts.

Overall, e.l.f. Beauty demonstrated strong financial performance in Q4 2026, with strategic initiatives aimed at addressing current challenges and positioning for future growth. However, the company must navigate headwinds related to pricing, competition, and market dynamics.