e.l.f. Beauty Raises 2026 Forecast

- The updated fiscal 2026 guidance projects net sales between $1.60 billion and $1.612 billion. For Q3, net sales surged 38% to $489.5 million, and adjusted earnings per share reached $1.24, significantly surpassing analysts' forecast of $0.70-$0.72. - A significant portion of the growth is attributed to the recent acquisition of skincare brand Rhode, which contributed $128 million, or 36 percentage points, to the third-quarter sales increase. The brand's launch in Sephora UK was the largest in the retailer's history, outperforming the previous record-holder by five times. - This marks the 28th consecutive quarter of sales growth for the company. The core e.l.f. Cosmetics brand continued to gain market share, adding 130 basis points in Q3, the most among over 700 cosmetics brands tracked by Nielsen. - International expansion is a key driver, with international net sales growing 44% in the third quarter. The company is focused on markets like the U.K., Canada, and Australia, with plans to re-enter Mexico via Sephora locations. - Gross margin saw a slight decrease of 30 basis points to 71%, primarily due to the impact of tariffs on goods from China. The company has been actively diversifying its supply chain, reducing its manufacturing in China from nearly 100% in 2019 to under 75% to mitigate these risks. - The company's average price point of approximately $6.50 positions it strongly within the "masstige" segment, which has outpaced both the mass and prestige markets with growth rates of 14-16%. - Beyond the flagship e.l.f. brand and the newly acquired Rhode, the company's portfolio also includes skincare brand Naturium (acquired in 2023) and the clean beauty brands Well People and Keys Soulcare.