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What were the key takeaways from e.l.f. Beauty’s earnings call?

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- **Record Growth**: Q2 net sales up 14% to $344 million, driven by Rhode acquisition and 7% e.l.f. brand consumption growth vs. 2% category.
- **Market Share Expansion**: 140bps market share gain, with Rhode contributing $52 million and 2.5x Sephora launch record.
- **Tariff Resilience**: Gross margin improved to 71% in H2, offsetting 3,500bps tariffs through price increases and mix.
- **Guidance Confidence**: 18-20% FY26 growth (including $200M Rhode), $302-306M EBITDA, and 40% Rhode YoY expansion.
- **Consumer Demand**: 10% YoY consumption growth despite $1 price increase, with Q3 showing stronger momentum.

**【CEO Summary Section】**
- Q2 net sales grew 14% to $344 million, driven by the acquisition of Rhode ($52 million contribution) and organic growth despite 3% decline in shipments due to retailer pricing delays.
- 27th consecutive quarter of net sales growth, with e.l.f. brand consumption up 7% vs. 2% category growth, gaining 140bps market share.
- Full-year guidance: 18-20% net sales growth (including $200 million from Rhode), 3-4% organic growth, and $302-306 million adjusted EBITDA.
- Rhode launch in Sephora North America was record-breaking, with plans to expand into U.K. and GCC markets.
- Tariffs reduced gross margin by 165bps in Q2, but second-half gross margin expected to improve to 71% due to price increases and mix benefits.

**【CFO Financial Commentary】**
- Q2 adjusted EBITDA of $66 million (-4% YoY) due to higher marketing spend (23% of sales vs. 24% last year) and tariff impacts.
- Gross margin 69% (-165bps YoY), with 45% tariffs expected for remainder of fiscal year (vs. 55% in Q2).
- Strong liquidity with $194 million cash and <2x leverage post-Rhode acquisition.
- Second-half marketing spend expected to rise to 27-29% of sales, partially offset by gross margin improvements.

**【Q&A Highlights】**
- **Retailer Pricing Resolution**: Shipment delays resolved as retailers updated prices, with no long-term impact on relationships.
- **Consumption Trends**: Q2 consumption up 10% YoY, with Q3 showing stronger momentum despite $1 price increase across portfolio.
- **International Growth**: 2% Q2 growth (cycling large Rossmann Germany launch), with expansion plans into Poland, GCC, and U.K.
- **Rhode Performance**: $57 million pre-acquisition Q2 sales, targeting $300 million annualized post-acquisition, with 40% YoY growth.
- **Tariff Mitigation**: Price increases and mix improvements offset 3,500bps tariff headwinds, with gross margin stabilizing in second half.


e.l.f. Beauty, Inc. (ELF) Q2 2026 Earnings Call Transcript

- **Q1 Growth Milestones**: 9% revenue rise to $354M, 12% EBITDA increase to $87M, 210bps market share gain. International sales now 20% of total.
- **Rhode Acquisition**: $800M deal adds premium skin care, with Sephora launches in U.S./Canada (Sept) and U.K. (end-2025).
- **Tariff Mitigation**: 1st price increase in 21 years, 75% portfolio under $10. Q2 gross margin pressure from 170% tariffs, offset by Rhode sales.
- **Innovation Success**: Halo Glow Skin Tint top skincare seller, TikTok-driven DIY Gloss Kit sold out in 24hrs.
- **International Expansion**: New partnerships in Poland, GCC, and Australia. U.K. market share up to #3 from #4.

**【CEO Summary Section】**
- Q1 net sales grew 9% to $354 million, driven by 5% U.S. growth and 30% international expansion. Adjusted EBITDA rose 12% to $87 million, with 210 basis points of market share gain.
- e.l.f. is the #1 unit share brand in color cosmetics, with 15% U.S. market share. The acquisition of Rhode, valued at $800 million, adds premium skin care and global reach.
- International sales now represent 20% of total revenue, up from 10% six years ago. New partnerships with Sephora in GCC countries and Rossmann in Poland are key growth drivers.
- Innovation highlights include the Halo Glow Skin Tint (top-selling skincare product) and the DIY Halo Gloss Kit, launched in under 4 weeks in response to TikTok trends.

**【CFO Financial Commentary】**
- Gross margin declined 215 basis points to 69% due to tariffs, with $50 million annualized impact at current rates. Marketing spend was 22% of sales, lower than planned due to Q2 shift.
- Free cash flow improved to $20 million (vs. $0.5 million last year). Balance sheet remains strong with $170 million cash post-Rhode acquisition.
- Tariff mitigation strategies include price increases (1st in 21 years), supply chain diversification, and international expansion. 75% of portfolio remains under $10 post-price hike.

**【Q&A Key Highlights】**
- **Tariffs & Margin Impact**: Q2 gross margin pressure from 170% tariffs flowing through, offset by 2 months of Rhode sales and pricing benefits. EBITDA margin expected at 20% for first half.
- **Sales Growth**: Q2 net sales growth >9% driven by Rhode (2 months of contribution). U.S. core business resilient with 5% growth, 210 basis points share gain.
- **Rhode Integration**: Rhode to launch in all U.S. & Canadian Sephora stores in September, targeting 40% aided awareness. EBITDA accretive despite $200M stock issuance.
- **Consumer Pricing Reaction**: 75% of portfolio under $10 post-increase, positive community feedback. Elasticity to be monitored post-August 1 price hike.
- **International Expansion**: 6 GCC countries, Poland (Rossmann), and Australia (Naturium) launches. e.l.f. now #3 in U.K. cosmetics, up from #4.


e.l.f. Beauty, Inc. (ELF) Q1 2026 Earnings Call Transcript

- **$1B rhode Acquisition**: Breakthrough brand with $212M DTC sales in 3 years, 10 SKUs, and 20% U.S. aided awareness. e.l.f. will leverage its retail network to accelerate global expansion. 
- **28% Revenue Growth**: Fiscal 2025 net sales hit $1.3B, driven by 190bp U.S. market share gain and 60% intl growth. 
- **Tariff Mitigation**: $1 price increase, 25% China supply chain diversification by FY2026, and intl expansion to offset $50M annual tariff cost. 
- **Teen Dominance**: e.l.f. #1 Teen Cosmetics brand (35% mind share), e.l.f. SKIN #6 in Teen Favorites. 
- **Free Cash Flow**: $115M in FY2025, up 85% YoY. Strong balance sheet with $149M cash and <1x leverage.

**【CEO Summary Section】**
- Fiscal 2025 net sales grew 28% to $1.3 billion, with adjusted EBITDA up 26%. U.S. market share increased by 190 basis points, Canada by 170, and UK by 270.
- e.l.f. Cosmetics ranked #1 Teen Favorite brand for the 7th consecutive year, with 35% mind share. e.l.f. SKIN rose to #6 in Teen Favorites.
- Acquired rhode, a high-growth beauty brand founded by Hailey Bieber, in a $1 billion deal (80% upfront, 20% earnout). rhode generated $212 million in DTC sales in its first 3 years.
- Tariffs on Chinese imports at 55% level could cost $50M annually. Mitigation strategies include $1 price increase globally, supply chain diversification, and international expansion.
- International sales grew 60% in FY25, now 20% of total revenue. New launches in Germany, Netherlands, Poland, and Mexico.

**【CFO Financial Commentary】**
- Q4 2025 net sales: $207 million (4% YoY growth). Adjusted EBITDA: $81 million (99% YoY increase). Adjusted EPS: $0.78 (53% YoY increase).
- FY2025 free cash flow: $115 million (vs. $62 million prior year). Ended with $149 million cash and <1x leverage.
- FY2026 outlook: No guidance due to tariff uncertainty. Q1 2026 gross margin impacted by tariffs, offset by price increases and cost savings.
- rhode to contribute from Q2 2026. Transaction financed with $600M debt and 2.6M shares.

**【Q&A Highlights】**
- **Tariff Mitigation**: $1 price increase effective Aug 2025. 75% of production still in China, diversifying to 25% non-China by FY2026. 
- **International Growth**: 60% YoY growth in FY2025. New launches in Kruidvat (Netherlands/Belgium) and Rossmann (Poland). 
- **rhode Integration**: Run independently from LA, with e.l.f. supporting global expansion. Sephora rollout in US/Canada/UK starting Q4 2025. 
- **Pricing Impact**: 99% positive community feedback. $1 increase preserves value proposition vs. 30%+ tariff headwind. 
- **Naturium Update**: Expanded to Ulta, Boots, and Shoppers Drug Mart. Strongest growth year in FY2025. 
- **Dollar General Performance**: Above expectations, gaining share in rural markets. 
- **Tariff Scenario**: If tariffs rise to 145%, impact would be material but mitigation playbook remains flexible.

e.l.f. Beauty, Inc. (ELF) Q4 2025 Earnings Call Transcript

- **Q3 Growth Leader**: 31% net sales growth, 66% international expansion, 30% digital channel surge.
- **Profitability**: 16% EBITDA growth to $69M, 71% gross margin with 40bps improvement.
- **Q4 Caution**: -1% to +2% net sales outlook due to lapping 2024 launches and softer January trends.
- **Long-Term Confidence**: 24+ consecutive quarters of growth, 14-16% FY '25H2 guidance in challenged category.

**【CEO Opening Remarks】**
- Q3 net sales grew 31% YoY to $292 million, driven by 66% international growth and 30% digital channel expansion.
- Adjusted EBITDA reached $69 million, up 16% YoY, with U.S. market share increasing 220 basis points.
- Q4 net sales outlook revised to -1% to +2% due to softer-than-expected January trends and lapping of major 2024 launches.
- FY '25H2 net sales growth guidance lowered to 14-16% (vs. prior 28-30%), but maintain 24+ consecutive quarters of growth.

**【CFO Financial Highlights】**
- GAAP net income: $43 million ($0.74 EPS) vs. $43 million ($0.74 EPS) last year.
- Gross margin improved 40bps to 71% due to FX benefits and cost savings.
- SG&A as % of sales: 54% (stable vs. prior year).
- FY '25 EBITDA guidance: $289-293 million (down from $304-308 million) due to $7M FX loss and top-line revision.

**【Q&A Key Takeaways】**
- **Consumer Trends**: January U.S. beauty category down 5%, e.l.f. share +90bps despite 12% scanner sales decline.
- **International Momentum**: 66% Q3 growth driven by Germany (+20% share), Netherlands, Italy, Mexico launches.
- **Tariff Mitigation**: 2019 playbook includes supplier diversification, cost savings, selective price increases.
- **Digital Strength**: Amazon sales growth outpaces overall digital (30% Q3 growth).

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