Key Takeaways
- e.l.f. Beauty reports a 9% year-over-year sales growth with revenues of $353.7 million in Q1 fiscal 2026.
- The company is expanding its product lines internationally while facing challenges from tariff uncertainties, preventing a full-year forecast.
- Adjusted EBITDA margins are projected at 20% for the first half of fiscal 2026, down from 23% last year due to rising costs.
Strong Financial Growth Amid Uncertain Tariffs
e.l.f. Beauty has released its financial results for the first quarter of fiscal 2026, ending June 30, 2025, showcasing a solid growth trajectory and notable increases in market share. Despite reporting a 9% rise in net sales, equivalent to $353.7 million, the company is withholding its full-year fiscal 2026 forecast due to ongoing tariff uncertainties affecting the industry.
For the first half of fiscal 2026, e.l.f. anticipates net sales growth to surpass the 9% experienced in Q1. However, the adjusted EBITDA margins are expected to be around 20%, compared to approximately 23% during the first half of fiscal 2025. This decline is attributed to higher tariff costs impacting profitability.
The trend of companies not providing full-year forecasts has been noted across various sectors. Business Insider highlighted earlier this year that many organizations, including well-known names like Procter & Gamble and Macy’s, are either reducing or eliminating earning predictions due to market instability.
Global Expansion of e.l.f. Brands
e.l.f. Beauty is significantly broadening its global footprint, reporting a surge in international sales from $28 million in 2019—accounting for 10% of total sales—to $266 million, now making up 20% of its overall revenue. During an earnings call, the company announced plans for continued expansion, including entry into Rossmann stores in Poland and Sephora across six Gulf Cooperation Council countries. This expansion follows the brand’s move into Sephora Mexico in 2024.
Additionally, e.l.f. plans to deepen its partnership with Dollar General, noting that 80% of the retailer’s outlets serve rural areas, attracting 60% of customers who have never previously purchased cosmetics there. Notably, over half of Dollar General shoppers trying e.l.f. products are new to the brand.
The company’s Notarium brand will also see increased availability in Boots locations within the United Kingdom and Sephora in Australia. In the U.S. and Canada, Rhode is scheduled to launch in all Sephora stores in September, with a planned rollout in the U.K. Sephora stores by the end of 2025.
Financial Metrics Highlighting Robust Performance
While the company reported solid sales growth, it faced a decline in gross margin, which fell by 215 basis points to 69%, primarily due to tariff impacts, although these were somewhat mitigated by favorable foreign currency rates. Selling, general, and administrative expenses increased to $195.8 million, constituting 55% of net sales, driven by higher marketing and professional fees. Adjusted SG&A stood at $177.3 million, or 50% of net sales.
The net income on a GAAP basis reached $33.3 million, while adjusted net income was $51.3 million. Diluted earnings per share came to $0.58 GAAP and $0.89 on an adjusted basis. Adjusted EBITDA grew by 12% year-over-year to $87.1 million, representing 25% of net sales.
As of June 30, 2025, e.l.f. Beauty possessed $170 million in cash and reduced its long-term debt to $256.7 million. CEO Tarang Amin expressed optimism about the company’s ongoing success: “Our strong Q1 results, including market share gains, showcase the consistent growth we’ve delivered for over six years. We remain excited about the opportunities ahead as we make the best of beauty accessible for all.”
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