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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

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