The Investor
21 May 2026, 09:09
e.l.f. Beauty Surges 10% in Premarket as Revenue Growth and FY27 Outlook Impress
e.l.f. Beauty jumped 10% in premarket trading after the value-focused beauty company reported its seventh consecutive year of net sales and market share growth, delivered a strong fourth quarter beat and provided a fiscal 2027 outlook that gave investors confidence the growth story remains intact despite significant tariff headwinds.
For the fourth quarter ended March 31, 2026, net sales surged 35% to $449.3 million, driven by growth across both retailer and e-commerce channels in the US and internationally. Gross margin expanded approximately 140 basis points to 73%, with pricing benefits more than offsetting higher tariff costs — a notable achievement given the broader consumer goods sector's struggle with tariff-related margin pressure. Adjusted diluted EPS was $0.32 and adjusted EBITDA was $58.8 million. The GAAP net loss of $49.4 million was driven almost entirely by a $57.6 million fair value adjustment on contingent consideration related to the rhode acquisition earnout — a charge that reflects rhode dramatically outperforming its revenue targets, which is a positive signal rather than a negative one.
For the full fiscal year 2026, net sales grew 25% to $1,636.5 million. Adjusted net income reached $185.9 million and adjusted diluted EPS was $3.13. Adjusted EBITDA grew 13% to $335.2 million, representing 20% of net sales. All five brands grew during the year, with rhode and Naturium cited as particularly strong performers.
The fiscal 2027 outlook was the catalyst for the premarket surge. The company guided for net sales of $1,835 million to $1,865 million, implying 12% to 14% growth, adjusted EBITDA of $379 million to $385 million and adjusted diluted EPS of $3.27 to $3.32. The guidance represents continued deceleration from recent hypergrowth rates but still points to a business compounding at a healthy pace while expanding absolute profitability.
The balance sheet warrants monitoring. Total debt rose to $841.7 million from $256.7 million a year ago, largely reflecting acquisition financing for rhode, while cash grew to $289.7 million.
The 10% premarket gain reflects a market that had been concerned about e.l.f.'s ability to sustain momentum amid tariff pressure and slowing category growth, and found in the results and guidance a credible case that the company's value proposition and brand portfolio expansion continue to resonate with consumers.
e.l.f. Beauty jumped 10% in premarket trading after the value-focused beauty company reported its seventh consecutive year of net sales and market share growth, delivered a strong fourth quarter beat and provided a fiscal 2027 outlook that gave investors confidence the growth story remains intact despite significant tariff headwinds.
For the fourth quarter ended March 31, 2026, net sales surged 35% to $449.3 million, driven by growth across both retailer and e-commerce channels in the US and internationally. Gross margin expanded approximately 140 basis points to 73%, with pricing benefits more than offsetting higher tariff costs — a notable achievement given the broader consumer goods sector's struggle with tariff-related margin pressure. Adjusted diluted EPS was $0.32 and adjusted EBITDA was $58.8 million. The GAAP net loss of $49.4 million was driven almost entirely by a $57.6 million fair value adjustment on contingent consideration related to the rhode acquisition earnout — a charge that reflects rhode dramatically outperforming its revenue targets, which is a positive signal rather than a negative one.
For the full fiscal year 2026, net sales grew 25% to $1,636.5 million. Adjusted net income reached $185.9 million and adjusted diluted EPS was $3.13. Adjusted EBITDA grew 13% to $335.2 million, representing 20% of net sales. All five brands grew during the year, with rhode and Naturium cited as particularly strong performers.
The fiscal 2027 outlook was the catalyst for the premarket surge. The company guided for net sales of $1,835 million to $1,865 million, implying 12% to 14% growth, adjusted EBITDA of $379 million to $385 million and adjusted diluted EPS of $3.27 to $3.32. The guidance represents continued deceleration from recent hypergrowth rates but still points to a business compounding at a healthy pace while expanding absolute profitability.
The balance sheet warrants monitoring. Total debt rose to $841.7 million from $256.7 million a year ago, largely reflecting acquisition financing for rhode, while cash grew to $289.7 million.
The 10% premarket gain reflects a market that had been concerned about e.l.f.'s ability to sustain momentum amid tariff pressure and slowing category growth, and found in the results and guidance a credible case that the company's value proposition and brand portfolio expansion continue to resonate with consumers.
