E.l.f. Beauty Shines in Earnings Call Amid Tariff Concerns

e.l.f. Beauty, Inc. ((ELF)) has held its Q4 earnings call. Read on for the main highlights of the call.

The recent earnings call for e.l.f. Beauty, Inc. highlighted a positive sentiment with the company reporting robust fiscal 2025 results. The call underscored consistent growth and successful international expansion, with the acquisition of Rhode presenting a promising opportunity for further growth. However, there were concerns about the impact of increased tariffs and the uncertainty they bring for fiscal 2026, along with the need for price increases.

Strong Fiscal 2025 Results

E.l.f. Beauty reported impressive fiscal 2025 results, with net sales growing by 28% and adjusted EBITDA increasing by 26%. This marks the 25th consecutive quarter of net sales growth and market share gains, showcasing the company’s strong performance and strategic execution.

Market Share Gains

The company achieved significant market share gains, with 190 basis points in the U.S., 170 basis points in Canada, and 270 basis points in the UK. These gains reflect e.l.f. Beauty’s successful strategies in capturing consumer interest and expanding its footprint in key markets.

International Expansion

International net sales saw a remarkable growth of 60% in fiscal 2025, with notable increases in markets such as Germany, Netherlands, Italy, and Mexico. This expansion highlights the company’s effective international strategies and its ability to tap into new markets.

Acquisition of Rhode

E.l.f. Beauty announced the acquisition of Rhode, a high-growth beauty brand, which achieved $212 million in net sales over the last 12 months. This acquisition is expected to enhance e.l.f.’s portfolio and leverage Rhode’s strong community engagement and growth potential.

Innovation and Product Launches

The company saw strong performance from new product launches like the Glow Reviver Melting Lip Balms and engagement campaigns such as the Mini-Trick Pony campaign. These innovations continue to drive consumer interest and brand loyalty.

Tariff Impact

With 75% of e.l.f.’s global production coming from China, increased tariffs may impact the cost of goods sold by approximately $50 million annually. This poses a significant challenge for the company in maintaining its cost structure.

Uncertain Fiscal 2026 Outlook

Due to the uncertainty around tariffs, e.l.f. Beauty did not provide an initial full-year fiscal 2026 outlook. This uncertainty could affect future financial planning and investor confidence.

Possible Price Increases

To mitigate the impact of tariffs, e.l.f. plans to increase prices by $1 globally on all products. While this strategy aims to offset increased costs, it may affect consumer demand and purchasing behavior.

Forward-Looking Guidance

During the call, e.l.f. Beauty reported a strong fiscal year 2025 with net sales growth of 28% and adjusted EBITDA growth of 26%. The company announced a $1 price increase across its entire product assortment globally, effective August 1, to mitigate tariff impacts. Despite tariff uncertainties, e.l.f. remains optimistic about continued market share growth and innovation, with the acquisition of Rhode expected to be accretive to its topline growth and earnings.

In summary, e.l.f. Beauty’s earnings call reflected a strong performance in fiscal 2025, with consistent growth and strategic acquisitions like Rhode promising further expansion. However, the looming tariff impacts and potential price increases pose challenges for fiscal 2026. The company’s ability to navigate these uncertainties will be crucial for maintaining its growth trajectory.