Elf Beauty (ELF) earnings Q4 2026
Elf Beauty is planning to stroll again among the tariff-fueled price increases it applied lower than a 12 months in the past after the retailer has seen a slide in demand that is ramped up in current months as customers deal with larger fuel costs.
“Whenever you take a price increase that’s that big, you’re going to see unit degradation, but I would say we’ve seen units drop off a bit more in the last few months as consumers have particularly been suffering with higher costs,” CEO Tarang Amin instructed CNBC in an interview. “So it’s one of the reasons why we want to reinforce the value proposition we have.”
Recently, Elf examined a $4 worth discount on its $18 Halo Glow pores and skin tint and noticed an almost 40% carry within the enterprise, which signaled to the corporate simply how “sensitive” customers are on pricing proper now, Amin stated.
As a end result, it plans to check further worth reductions on sure households of merchandise to see if that may drive unit development. Last August, it raised prices by $1 throughout its whole Elf assortment.
“There’ll be additional items that we will test lower pricing on to really be able to reinforce our value proposition at a time when the consumer is suffering,” Amin stated.
Elf’s plans to decrease costs got here as the corporate introduced fiscal fourth-quarter earnings Wednesday that beat Wall Street’s expectations on the highest and backside strains however issued steering that didn’t wow.
Here’s how the wonder retailer carried out throughout the quarter in contrast with what Wall Street was anticipating, based mostly on a survey of analysts by LSEG:
- Earnings per share: 32 cents adjusted vs. 29 cents anticipated
- Revenue: $449 million vs. $423 million anticipated
Elf inventory rose roughly 7% in after-hours buying and selling on Wednesday.
In the three months ended March 31, Elf posted a lack of $49.4 million, or 82 cents per share, in contrast with revenue of $28.3 million, or 49 cents per share, a 12 months earlier.
Elf’s loss was primarily pushed by a $57.6 million value related to its acquisition of Rhode that the corporate incurred below the phrases of the deal following better-than-expected efficiency from the model. Excluding that cost and different one-time bills, Elf noticed web revenue of $19.4 million, or 32 cents per share.
Sales rose to $449 million, up about 35% from $332.6 million a 12 months earlier.
During the quarter, Elf noticed its gross margin develop by 1.4 proportion factors to 73% — thanks largely to the upper pricing that the corporate is now within the strategy of strolling again for some merchandise. When requested what these reductions will imply for margins shifting ahead, Amin stated the corporate is anticipating a $55 million tariff refund, which can offset the affect to profitability.
Still, the corporate’s fiscal 2027 steering got here in weaker than anticipated. Elf stated it is anticipating gross sales of between $1.84 billion to $1.87 billion, which is primarily under expectations of $1.87 billion, in line with analysts surveyed by LSEG.
The profitability image appears to be like worse. The firm stated it is anticipating adjusted earnings per share to be between $3.27 and $3.32, nicely under expectations of $3.61 per share.
“I’m really proud of the profitability we just delivered that was in the face of 55% tariffs, so the team’s done a really nice job navigating through a pretty crazy tariff environment,” Amin stated. “For the year ahead, we’ve guided to gross margins being flat, which we also think is quite strong in the environment we’re operating in. We still have tariffs that we’re facing at the 35% level, which is what we’ve modeled for the year, and then continued the retail expansion of Rhode.”
Since its acquisition of Rhode, introduced a few 12 months in the past, the well-known magnificence model has been the first engine behind Elf’s total development. Over the previous 12 months, gross sales have grown 80%, fueled by its enlargement into Sephora North America, Sephora UK and Mecca. Rhode now has the No. 1 model place in all three retailers.
This fall, Rhode is anticipated to launch in 19 European nations with Sephora so there’s nonetheless a “huge amount of white space” for the model, Amin stated.
In years previous, Elf’s development was primarily pushed by ultra-popular product launches. With Rhode now driving development, it is unclear how a lot runaway the model nonetheless has and what that may finally imply for the corporate. Amin stated “balanced growth” will outline the story shifting ahead throughout his portfolio of manufacturers, which he stated he is open to increasing.
“Our first priority is realizing the organic growth we have with our existing portfolio. We have a very high bar when it comes to M&A,” Amin stated. “But the good news is we’re a destination of choice for the strongest founders in the industry, just given our approach of supporting a founder’s vision and being able to lend our capabilities and continue to accelerate the growth. So I’d say M&A is definitely part of our future.”