e.l.f. Beauty, Inc.

Q1 net sales grew 36% year over year. Rhode contributed approximately $160 million in net sales. U.S. net sales grew 29% and international net sales grew 61%. Gross margin was 83%, up approximately 1,400 basis points year over year; excluding $50 million of IEEPA tariff refunds, gross margin was still up about 350 basis points. Adjusted EBITDA was $168 million, up 93% from $87 million, and adjusted net income was $105 million or $1.75 per diluted share versus $51 million or $0.89 a year ago. The company ended Q1 with $344 million in cash and repurchased approximately $50 million of stock. Full-year fiscal '27 guidance was raised to net sales growth of approximately 18% to 20%, adjusted EBITDA of $401 million to $407 million, adjusted net income of $212 million to $215 million, and adjusted EPS of $3.50 to $3.55. Management said Q2 total net sales growth should be in the mid-30s. It expects fiscal '27 gross margin to be up approximately 200 basis points year over year, adjusted EBITDA margins of approximately 21%, and marketing/digital spend at the high end of the prior 23% to 25% range.

Tarang Amin emphasized that the quarter reflected broad-based brand strength and a multi-brand growth story, not just e.l.f. cosmetics. He highlighted pricing tests, fall innovation, international expansion, and category adjacencies like e.l.f. Hair as targeted ways to reinforce the brand and extend growth. His tone was confident and upbeat, especially on rhode, which he called one of the most special brands he has seen and a major driver of future white space.

Mandy Fields focused on the financial bridge behind the quarter and the updated outlook. She said Q1 gross margin of 83% included about 1,050 basis points of benefit from the $50 million tariff refund, while adjusted EBITDA rose to $168 million and adjusted EPS to $1.75. She also noted cash of $344 million at quarter end, about $53 million of tariff refunds in cash, approximately $50 million of stock repurchases, and net debt to adjusted EBITDA below 1.5x. For fiscal '27, she said the company plans to fully reinvest the $50 million tariff refund through lower prices on a subset of SKUs and higher marketing, while also funding technology, SAP Phase 2, working capital, and rhode’s Europe launch.

Analysts pressed management on why guidance only moved up modestly despite a strong beat, how much of the tariff refund would be reinvested, and whether pricing reductions would hurt margins. Management said the raise is meaningful in absolute terms and that the $50 million refund will be spent back in Q2 through Q4, with the year still expected to come in around 21% adjusted EBITDA margin. Questions also focused on rhode’s Europe expansion, where management said most of the pipeline will ship in Q2 and that Sephora’s best doors are often outside the U.S. Another theme was e.l.f. pricing: management said about 90% of SKUs were already priced appropriately, while about 10% showed enough unit lift at lower prices to justify keeping them down.