e.l.f. Beauty, Inc.

e.l.f. Beauty sells cosmetics, skincare and related products through retailers and its own online channels. Its portfolio includes e.l.f. Cosmetics, e.l.f. SKIN, e.l.f. Hair, Rhode, Naturium and Well People. The company reports one operating segment and trades on the New York Stock Exchange under ELF.

Latest financial results

Adjusted earnings exclude stock compensation, changes in acquisition earnout estimates, specified acquisition and system costs, intangible amortization and related tax effects. Adjusted EBITDA also adds back interest, taxes, depreciation and amortization. Tariff refunds remain in these adjusted results.

Growth and spending

Reported quarterly sales rose 51%. Management described approximately 35% organic growth, including Rhode after its August 5 acquisition anniversary. The remaining approximately 16 percentage points came from the acquisition-period comparison before that date. Shipments for Rhode's Sephora Europe launch also supported sales.

Quarterly gross margin was about 71%, with approximately 0.3 percentage points from tariff refunds. Refunds reduced cost of sales by $51.7 million in the first half, including $1.7 million in the latest quarter.

Marketing and digital investment were 21% of quarterly sales, below plan due to spending moving into the second half. e.l.f. expects full-year marketing near the upper end of 23% to 25% of sales. It assumes roughly $52 million of tariff refunds will be reinvested through prices and marketing, for a neutral full-year adjusted EBITDA effect.

Fiscal 2027 outlook

For the year ending March 31, 2027, sales guidance is $2.003 billion to $2.029 billion, compared with $1.938 billion to $1.968 billion in August. Adjusted EBITDA is forecast at $421 million to $427 million, up from $401 million to $407 million. Adjusted earnings guidance rises to $3.82 to $3.86 a share from $3.50 to $3.55. The diluted share-count assumption remains 60.5 million and the adjusted tax-rate range remains 25% to 26%.

Management forecasts annual organic growth of 9% to 11%, including Rhode after its anniversary, and second-half sales growth of 7% to 10%. It expects a low-teens second-half adjusted EBITDA margin as reinvestment and delayed spending take effect. Annual gross margin excluding refunds is expected to be approximately flat year over year.

Cash and borrowing

At September 30, cash and cash equivalents were $350.8 million. Borrowing principal was $826.7 million, or $824.6 million after unamortized fees, including $30 million classified as current debt. The $500 million revolving facility had $243.3 million unused.

First-half operating cash flow was $126.3 million, compared with $50.6 million a year earlier; capital spending was $4.0 million versus $13.9 million. Current cash flow includes tariff refunds and interest, while the prior comparison included $47.1 million of Rhode seller expenses paid at the acquisition. Cash used in first-half share repurchases was $50.0 million.

Completed Rhode acquisition and earnout

The Rhode acquisition closed August 5, 2025. The finalized accounting consideration was $897.5 million, comprising $590.1 million in cash, $300.3 million in stock and an initial $7.1 million fair value for the earnout.

The earnout liability was valued at $98.5 million at September 30, 2026, reflecting better sales performance and expectations. After the quarter, e.l.f. paid $30 million on October 30 for the first milestone. The original agreement allows up to $200 million of total earnout payments; later payments depend on further performance milestones.