Shares of cosmetics brand e.l.f. Beauty (ELF) lost their magic on Thursday, with ELF stock shedding more than 24% during pre-market trading. The California-based company’s second-quarter Fiscal Year 2026 earnings results and full-year guidance issued on Wednesday fell short of Wall Street’s expectations.
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During the quarter, the beauty brand’s revenues jumped 14% from $301.07 million a year ago to reach $343.90 million. However, the sales number fell significantly behind the analysts’ consensus forecast of $365.82 million.
This is even as e.l.f. Beauty’s international net sales expanded only by 2% during the quarter, with revenue weighed down by the brand’s big launch into Germany last year through Rossmann stores, one of the largest drugstore chains in Europe.
Similarly, e.l.f. Beauty earned 68 cents per share during the three months, falling 12% year-over-year from 77 cents. However, the figure towered above Wall Street’s anticipated 57 cents per share.
Growth Streak Continues into 27th Quarter
The mixed results come as e.l.f. Beauty, which focuses on cruelty-free makeup and skincare products, delivered its 27th consecutive quarter of sales growth, as net sales jumped 14% YoY. The growth was powered by the “record-breaking” launch of Rhode, the skincare brand launched by model Hailey Bieber and acquired by e.l.f Beauty for about $1 billion earlier this year.
e.l.f. Beauty, which is popularly known for its skin enhancer Halo Glow Liquid Filter, makeup gel Power Grip Primer, and concealer Camo Concealer, rolled out Rhode’s products in the U.S. and Canada at Sephora, the online and physical cosmetic store brand owned by French luxury group LVMH Moët Hennessy Louis Vuitton (LVMUY).
Tariff Costs Hit Gross Margin
Meanwhile, while e.l.f. Beauty grew its market share by 140 basis points during the quarter, its core business — excluding the newly acquired Rhode brand — saw sales drop 3% YoY because the company chose to halt shipments to certain retail partners.
Similarly, its gross margin fell by 165 basis points compared to a year ago due to rising tariff costs. The company’s adjusted EBITDA (earnings before interest, tax, depreciation, and amortization) also fell 4% YoY to $66 million.
e.l.f. Beauty Remains ‘Confident’
Looking ahead, the beauty company expects to expand its sales between 18% and 20% YoY, with adjusted EBITDA between $302 and $306 million and net income between $165 million and $168 million. The forecasts fell below Wall Street’s expectations, even as economic uncertainty weighs on American consumers.
“We remain confident in our strategy to grow market share and capitalize on the significant whitespace ahead of us,” noted Tarang Amin, e.l.f Beauty’s chairman and chief executive.
Is ELF a Good Stock to Buy Now?
On Wall Street, e.l.f. Beauty’s shares currently enjoy a Strong Buy consensus rating based on 12 Buys and three Holds assigned by 15 analysts over the past three months. Moreover, the average ELF price target of $152 indicates about a 29% upswing from the current trading level.
