E.l.f. Beauty (ELF) earnings Q2 2026
Hailey Bieber’s cosmetics line Rhode is expected to increase Elf Beauty‘s annual sales rose $200 million this fiscal year, but its new parent company’s forecast for the full year still fell short of expectations, causing its shares to tumble 29% on Wednesday.
Elf, which declined to release its full-year forecast last quarter, expects full-year revenue to be between $1.55 billion and $1.57 billion, implying 18% to 20% sales growth. That’s well below the $1.65 billion analysts expected, according to LSEG.
In an interview with CNBC, CEO Tarang Amin said Rhode, which the company acquired in a blockbuster $1 billion deal earlier this year, is expected to increase annual sales by $200 million this fiscal year, or $300 million on an annualized sales rate basis.
Rhode’s expected contribution to sales represents approximately 13% of the revenue forecast, demonstrating how important the deal is to Elf’s future as its massive growth continues to slow. This suggests that Elf needs Rhode to help it grow in the coming quarters, and without the acquisition, its higher revenue potential could be much weaker.
From a profitability perspective, Elf expects full-year adjusted earnings per share to be between $2.80 and $2.85, according to LSEG, well below expectations of $3.58.
In addition to guidance, Elf missed revenue estimates but outperformed earnings in its fiscal second-quarter results.
Here’s how the beauty company is performing compared to Wall Street’s expectations, according to a survey of analysts by LSEG:
- Earnings per share: 68 cents adjusted, 57 cents expected
- Revenues: 344 million dollars, while the expectation was 366 million dollars
The company’s reported net income for the three months ended Sept. 30 was $3 million, or 5 cents per share, compared to $19 million, or 33 cents per share, a year ago. Excluding one-time items related to stock-based compensation and other non-recurring expenses, Elf had earnings of 68 cents per share.
Sales rose nearly 14% to $344 million from $301 million a year earlier.
Amin blamed shortfalls in revenue and guidance for the company’s failure to issue guidance last quarter, which he said could have impacted consensus estimates.
“We actually believe that both the sales we offer and the guidance on net sales are quite strong,” he said.
Elf’s profitability, which comes primarily from China, has been crushed by President Donald Trump’s new tariffs. While its net revenue fell a staggering 84% during the quarter, the company said its gross margin fell 1.65 percentage points, mainly due to higher tariff costs.
The second quarter is expected to see the biggest hit from the tariffs, and the impact is expected to gradually diminish from there, Amin said.
“We increased our prices by $1 starting August 1 in response to the tariffs, so you are seeing the tariff impact without pricing this quarter,” Amin said. “Gross margin will actually increase sequentially in the second half of the year.
Barring major product launches from the namesake brand (which are currently in the works), Amin said Rhode is Elf’s primary growth driver, and for now the business is growing at about 40% year over year.
It launched at Sephora stores nationwide in September and is the largest brand launch the retailer has seen in North America in its history, Amin said.
“It was two and a half times bigger than number two, [Sephora’s] Amin said it performed extremely well as it was the second largest launch ever. “We continue to see incredible growth potential, not only in North America, where we’ve just launched, and in the UK, where we’re about to launch, but also internationally. … We definitely see the global potential of this brand, and we see it being much bigger than it is today.”
