e.l.f. Beauty (NYSE:ELF) reported third quarter fiscal 2026 results highlighted by strong consolidated growth driven by its recent Rhode acquisition, while management raised full-year guidance on both the top and bottom lines. Executives also detailed upcoming innovation launches, marketing plans, and further retail expansion across the company’s portfolio.
Quarterly results: sales up 38% with Rhode driving the majority of growth
Chairman and CEO Tarang Amin said the company delivered “another quarter of consistent category-leading growth,” noting that Q3 net sales increased 38% and adjusted EBITDA rose 79%. The quarter marked e.l.f. Beauty’s 28th consecutive quarter of net sales growth, which Amin described as a rare feat among public consumer companies.
Excluding Rhode, Fields said Q3 net sales were up approximately 2% year over year, below expectations due to softer trends in the U.K. and Germany, the company’s largest international markets. Management cited weaker consumption in the U.K. and cycling the company’s large Rossmann Germany launch.
By geography, the company said U.S. net sales grew 36% year over year, while international net sales rose 44%. Pricing and product mix added about 38 points to growth, while unit volumes were relatively flat year over year.
Profitability, spending, and capital allocation
Fields reported Q3 gross margin of 71%, down about 30 basis points year over year and up 200 basis points sequentially versus Q2. The year-over-year decline was largely driven by tariffs, partially offset by pricing and mix.
On an adjusted basis, SG&A was 51% of sales versus 54% a year ago. Fields said the improvement reflected marketing leverage and a timing shift of some SG&A into the fourth quarter, even as the company continued to invest in team and infrastructure. Marketing and digital investment was 21% of net sales versus 27% in the prior-year quarter.
Adjusted EBITDA for the quarter was $123 million, while adjusted net income was $74 million, or $1.24 per diluted share, compared with $43 million, or $0.74 per diluted share, a year ago.
On the balance sheet, e.l.f. Beauty ended the quarter with $197 million in cash, compared with $74 million a year earlier. During the quarter, the company repurchased about $50 million of common stock, citing what it viewed as a disconnect between market valuation and business fundamentals. About $400 million remained available under the repurchase authorization at quarter end. Fields said liquidity remained strong with less than 2x net debt to adjusted EBITDA, even after acquiring Rhode.
Brands and market share: continued outperformance in the U.S.
Amin emphasized consumption and market share metrics across brands. In the U.S. during the quarter, e.l.f. Cosmetics consumption grew 8%, which he said was about twice the category rate, and the company increased its market share by 130 basis points, described as the largest share gain among more than 700 cosmetics brands tracked by Nielsen. e.l.f. Skin consumption grew 16% in the U.S., also about two times category performance.
Management also discussed the scale of its brands in the broader market, noting that among nearly 1,800 cosmetics and skincare brands tracked by Nielsen, only 14 exceed $200 million in annual retail sales, and e.l.f. Beauty has four of those brands.
On pricing, Amin said the company executed a 15% price increase and saw “single-digit unit declines,” which he characterized as a strong consumer response. He added that many competitors typically take price increases in spring, and said e.l.f. believes its value proposition will improve over time because it has already “led with pricing.” The company stated that 75% of its product portfolio remains priced at $10 or less, with an average e.l.f. Cosmetics price of $7.50 versus about $9.50 for legacy mass brands and nearly $30 for prestige brands.
Innovation and marketing: new launches and major campaigns
Management highlighted upcoming innovation for spring 2026, including:
- Glow Reviver Slipstick at a $10 price point, which Amin said had already become the No. 1 new lipstick on Amazon and TikTok Shop at debut.
- Soft Glam Satin Concealer, the brand’s first concealer innovation in five years, launching at a $5 price point.
Amin said the company’s namesake brand held four of the top 10 new products in mass cosmetics in 2025, following six of the top 10 in 2024. He also framed share opportunity by segment, noting e.l.f. has a 22% share in face makeup compared with 13% in lip and 9% in eye, which he described as “white space” for further gains. In Q&A, he said mascara innovation is expected closer to the fall timeframe.
On marketing, the company discussed recent and planned collaborations, including a sequel partnership with Liquid Death that drove “over 4 billion earned impressions,” with a “Lip Crypt Vault” selling out in 19 minutes. Amin also described engagement tied to the company’s Roblox experience. The company also announced a collaboration with H&M to launch three fragrances—e.l.f.’s first global collaboration, first fragrance launch, and H&M’s first partnership with another beauty brand—rolling out in 27 countries starting January 29 with planned outreach to H&M’s loyalty members.
Fields said marketing for the second half is expected to be about 27% of net sales (up about 200 basis points year over year), with Q4 campaigns including a “big game” commercial debuting on Peacock and additional distribution across platforms. She said the company is targeting 24%–26% of net sales for marketing for the full year, unchanged, with some timing shifts affecting quarterly cadence.
Retail expansion and international: disciplined rollout for Rhode, more doors for Naturium
Management pointed to retail expansions as a key growth lever. Amin said e.l.f. remains the most productive cosmetics brand on a dollar-per-linear-foot basis with its largest retail customers globally. The company expects to expand space at Ulta Beauty in spring 2026 and to launch e.l.f. with DM in Germany.
Rhode, acquired in August, was highlighted as a major growth engine. Amin said Rhode achieved the biggest launch in Sephora North America history—2.5 times bigger than any other brand—and later delivered the largest Sephora U.K. launch in history, outperforming the previous record by 5 times. The company plans to launch Rhode in Australia and New Zealand with Mecca, and Amin said management intends to be disciplined in global rollout while maintaining launch quality. Fields said the company has not broken out Rhode’s Q3 sales by U.S. versus international, but reiterated that international represents about 20% of Rhode’s DTC sales.
Naturium is also expanding distribution. Amin said the brand has added retail partners since acquisition, including Ulta Beauty in the U.S., Shoppers Drug Mart in Canada, Boots in the U.K., and Sephora in Australia and New Zealand. The company plans to expand Naturium to Walmart for the first time this spring, launching in a subset of U.S. stores.
International remains a smaller portion of total company sales compared to legacy peers. Amin said international represents about 20% of e.l.f. Beauty net sales, versus over 70% for some established competitors.
For the U.K., Amin acknowledged a more promotional environment as a headwind and said the company aims to reinforce its value proposition, lean on new regional leadership, and increase marketing levers while continuing to bring innovation to the market.
Raised fiscal 2026 outlook: higher sales and EBITDA expectations
Fields said e.l.f. Beauty raised its fiscal 2026 outlook “primarily driven by Rhode’s outperformance.” The company now expects:
- Net sales growth of approximately 22%–23% year over year (up from 18%–20%).
- Rhode net sales of approximately $260 million–$265 million (up from $200 million), implying about 70% year-over-year growth for Rhode on an annualized basis.
- Adjusted EBITDA of approximately $323 million–$326 million (up from $302 million–$306 million), with adjusted EBITDA margins around 20%.
For the second half, guidance implies 31%–33% net sales growth. Excluding Rhode, the company expects net sales to be up about 2%, with Fields outlining an assumption of ~6% global consumption growth and a 4-point headwind from pipeline as the company cycles significant retail expansion from the prior year. Fields said consumption and market share gains are key indicators of underlying business health, and that shipment trends tend to normalize over time.
On tariffs, Fields said there have been no changes since a November 10 adjustment, with the tariff rate now at 45% after being as high as 170% earlier in the fiscal year. If the rate holds, she said it could become a tailwind in fiscal 2027 as the company cycles the earlier higher rates.
About e.l.f. Beauty (NYSE:ELF)
e.l.f. Beauty (NYSE: ELF) is an American cosmetics company known for offering an extensive range of affordable, trend-driven makeup and skincare products. The company’s portfolio spans foundations, lipsticks, mascaras, brushes, serums, masks and other beauty essentials, all positioned at accessible price points. e.l.f. Beauty maintains a direct-to-consumer platform through its e-commerce site and engages in widespread retail partnerships with major chains such as Target, Walmart, Ulta Beauty and Amazon.
Founded in 2004 and headquartered in Oakland, California, e.l.f.
