E.l.f. Beauty (ELF) earnings Q4 2026
Elf Beauty It plans to roll back some of the tariff-induced price increases it implemented less than a year ago after the retailer saw a decline in rising demand in recent months as consumers struggled with high gas prices.
“When you make such a big price increase you will see deterioration in units, but I would say we have seen a little bit more deterioration in units in the last few months as consumers are suffering particularly from higher costs,” CEO Tarang Amin told CNBC in an interview. “So that’s one of the reasons why we want to strengthen the value proposition that we have.”
Amin said Elf recently tested a $4 price cut on its $18 Halo Glow skin tint and saw a nearly 40% increase in business, signaling to the company how “sensitive” consumers are about pricing right now.
As a result, the unit plans to test additional price cuts on certain product families to see if they will support growth. Last August, it increased prices by $1 across its entire Elf product range.
“There will be additional products where we will test lower prices so that we can really strengthen our value proposition in a time of consumer distress,” Amin said.
Elf’s plans to cut prices come as the company announced guidance on Wednesday that its fiscal fourth-quarter earnings beat Wall Street’s expectations on the top and bottom lines but did not surprise.
Here’s how the beauty retailer performed during the quarter compared to Wall Street’s expectations, according to a survey of analysts by LSEG:
- Earnings per share: 32 cents corrected 29 cents expected
- Revenues: $449 million while expectation was $423 million
Elf shares rose nearly 7% in after-hours trading Wednesday.
For the three months ended March 31, Elf reported a loss of $49.4 million, or 82 cents per share, compared to revenue of $28.3 million, or 49 cents per share, a year earlier.
The main reason for Elf’s loss was the $57.6 million cost the company incurred in connection with its acquisition of Rhode under the terms of the deal after the brand performed better than expected. Excluding this fee and other one-time expenses, Elf had net income of $19.4 million, or 32 cents per share.
Sales rose nearly 35% to $449 million from $332.6 million the year before.
During the quarter, Elf saw its gross margin increase 1.4 percentage points to 73%; This is largely thanks to high pricing, which the company is currently in the process of backtracking on for some products. When asked what these reductions would mean for margins moving forward, Amin said the company expects a $55 million tariff rebate that will offset the impact on profitability.
Still, the company’s 2027 financial forecast came in weaker than expected. Elf expects sales of $1.84 billion to $1.87 billion, according to analysts surveyed by LSEG, which is well below expectations of $1.87 billion.
The profitability picture looks worse. The company said it expects adjusted earnings per share to be between $3.27 and $3.32, well below expectations of $3.61 per share.
“I’m really proud of the profitability we just delivered despite 55% tariffs, so the team did a really good job in a pretty crazy tariff environment,” Amin said. “For next year, we’ve got gross margins remaining stable, which we think is pretty strong in the environment we operate in. We still have tariffs that we’re facing at 35%, which is what we’ve modeled for the year, and then we’ve continued Rhode’s retail expansion.”
Since its acquisition of Rhode, which was announced nearly a year ago, the famous beauty brand has been the main engine behind Elf’s overall growth. Last year, sales increased 80%, driven by expansion into Sephora North America, Sephora UK and Mecca. Rhode now holds the #1 brand position at all three retailers.
Rhode is expected to launch in 19 European countries with Sephora this fall, so there’s still “a huge amount of white space” for the brand, Amin said.
In past years, Elf’s growth has been driven primarily by ultra-popular product launches. While Rhode now continues to grow, it’s unclear how much runway the brand still has and what that will ultimately mean for the company. Amin said that “balanced growth” will define the story moving forward in the brand portfolio, which he said is open to expansion.
“Our first priority is to achieve the organic growth we have with our current portfolio. Our bar is very high when it comes to mergers and acquisitions,” Amin said. “But the good news is that, given our approach to supporting a founder’s vision, being able to lend our talent and continuing to accelerate growth, we are the destination of choice for the strongest founders in the industry. So I would say mergers and acquisitions are definitely part of our future.”
