e.l.f. Beauty Q1 Earnings Call Highlights

e.l.f. Beauty’s fiscal 2027 Q1 sales rose 36% for its 30th consecutive quarter of growth, driven by Rhode and international markets. Adjusted EBITDA nearly doubled to $168 million, while gross margin reached 83%, aided significantly by approximately $50 million in tariff refunds. The company now expects fiscal 2027 sales growth of 18% to 20%, adjusted EBITDA of $401 million to $407 million, and adjusted EPS of $3.50 to $3.55. Rhode is expected to contribute about 13 percentage points of annual sales growth before itsAcquisition is fully annualized. e.l.f. will reinvest tariff refunds in selective price reductions and increased marketing, while expanding e.l.f. Hair, e.l.f. Skin, Naturium and Rhode across new retailers and international markets. Rhode’s European Sephora launch is scheduled for September, supporting projected second-quarter sales growth in the mid-30% range. e.l.f. Beauty NYSE: ELF reported first-quarter fiscal 2027 net sales growth of 36%, marking its 30th consecutive quarter of sales growth, as strong performance from Rhode and international markets helped offset a decline in organic unit volumes. Chairman and Chief Executive Officer Tarang Amin said the company’s momentum prompted it to raise its full-year outlook. The company now expects fiscal 2027 net sales to increase 18% to 20%, compared with its previous expectation of 12% to 14% growth. Senior Vice President and Chief Financial Officer Mandy Fields said Rhode contributed approximately $160 million of net sales during the quarter, outperforming the company’s expectations. Organic net sales excluding Rhode were largely in line with the company’s prior outlook for a high-single-digit decline, reflecting comparisons against a busy prior-year shipping period and the prior-year launch of e.l.f.’s Glow Reviver Melting Lip Balm. U.S. net sales rose 29%, while international net sales increased 61%. Pricing and product mix added about 39 percentage points to total sales growth, while unit volumes declined approximately 3 percentage points. Gross margin rose about 1,400 basis points year over year to 83%. Fields said roughly 1,050 basis points of the improvement came from approximately $50 million in IEEPA tariff refunds received during the quarter and recorded in cost of goods sold. Excluding the refunds, gross margin still increased about 350 basis points, helped by pricing and lower tariff rates compared with the prior year. Adjusted EBITDA increased 93% to $168 million, while adjusted net income rose to $105 million, or $1.75 per diluted share, from $51 million, or $0.89 per share, a year earlier. The tariff refunds added approximately $40 million to adjusted net income, or about $0.68 per diluted share, Fields said. The company ended the quarter with $344 million in cash, up from $170 million a year earlier. During the quarter, it repurchased about $50 million of its common stock. Fields said e.l.f. Beauty also expects to use some cash later in the fiscal year to make the first Rhode earn-out payment, given the brand’s performance. Amin said the company expanded a price-discovery test that began in May from one product to most e.l.f. brand stock-keeping units. The effort followed the company’s $1 price increase last August, which was implemented in response to tariffs and inflationary pressures.