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Net Sales: $344 million, up 14% year over year.

Adjusted EBITDA: $66 million for Q2.

Market Share Gains: 140 basis points increase in Q2.

Gross Margin: 69%, down approximately 165 basis points from the prior year.

Adjusted Net Income: $41 million or $0.68 per diluted share.

Cash on Hand: $194 million at the end of the quarter.

Rhode Acquisition Contribution: $52 million to Q2 net sales.

US Net Sales Growth: 18% year over year in Q2.

International Net Sales Growth: 2% year over year in Q2.

Full Year Net Sales Growth Guidance: 18% to 20% year over year.

Adjusted EBITDA Guidance: $302 million to $306 million for fiscal '26.

Adjusted EPS Guidance: $2.80 to $2.85 per diluted share for fiscal '26.

Tariff Impact: 45% tariff rate assumed for the remainder of the fiscal year.

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Release Date: November 05, 2025

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

e.l.f. Beauty Inc (NYSE:ELF) achieved a 14% increase in net sales for Q2, marking the 27th consecutive quarter of net sales growth.

The acquisition of Rhode contributed significantly to net sales, adding $52 million or approximately 17 percentage points to Q2 results.

e.l.f. Beauty Inc (NYSE:ELF) continues to outperform the US mass cosmetics and skincare categories, with the e.l.f. brand growing 7% this quarter, three times the category growth.

The company successfully launched Rhode in Sephora North America, achieving the biggest launch in Sephora's history.

e.l.f. Beauty Inc (NYSE:ELF) maintains a strong value proposition, with 75% of its portfolio priced at $10 or less, even after a recent price increase.

Organic net sales, excluding Rhode, were down approximately 3% in Q2, indicating a decline in the core business.

Q2 shipments were below consumption due to a temporary halt in shipments to retailers slow to implement a price increase.

Gross margin declined by approximately 165 basis points year-over-year, primarily due to incremental tariff costs.

Adjusted EBITDA decreased by 4% compared to the previous year, reflecting increased SG&A expenses.

The company faces significant tariff headwinds, with tariffs impacting cost of goods sold by an estimated $17 million for every 10 percentage point increase.

Q: Can you elaborate on the impact of shipment delays due to pricing issues and how this will affect future quarters? A: Mandy Fields, Senior Vice President, Chief Financial Officer, explained that the primary driver of the disconnect between consumption and shipments in Q2 was the pricing impact. While shipments and consumption do not always align perfectly, they tend to even out over time. The company expects to recover some of the shipment delays in Q3, but not on a one-to-one basis. The underlying growth for the second half is projected at 2% to 5%, driven by strong consumption trends, despite cycling significant space expansions at Dollar General and Target.

Q: How did e.l.f. resolve the pricing issue with retailers, and will it affect future relationships? A: Tarang Amin, Chairman and CEO, stated that e.l.f. maintains an everyday low price strategy consistent across retailers, contrasting with competitors who price higher and offer discounts. The pricing issue arose when some retailers were slow to reflect the new pricing effective August 1. The issue was resolved as retailers adjusted to the correct pricing, and shipments have resumed normally. This approach helps maintain price integrity in the market.

Q: What are the expectations for international growth, and how does it compare to the US market? A: Mandy Fields noted that international net sales grew 2% in Q2, impacted by the prior year's large launch into Rossmann, Germany. Despite this, international remains a significant growth opportunity, with several planned launches, including Rossmann in Poland and Sephora in the GCC countries. The company expects both US and international markets to contribute to growth, with international expansion being a key focus.

Q: How is the Rhode acquisition expected to impact e.l.f.'s financials, particularly in terms of sales and margins? A: Mandy Fields indicated that Rhode is expected to contribute approximately $200 million in net sales for the year post-acquisition, with an annualized projection of $300 million, reflecting 40% year-over-year growth. Rhode is anticipated to be accretive to e.l.f.'s EBITDA margins, despite planned investments in team and marketing to support its growth.

Q: What is the rationale behind the increased marketing spend in the second half of the year? A: The increase in marketing spend, projected at 27% to 29% of net sales in the second half, is primarily a timing shift, with some campaigns moving from Q2 to Q3 and Q4. The company aims to maintain its marketing and digital spend within the 24% to 26% range for the full year, supporting brand growth and consumer engagement.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.