E.l.f. Beauty (ELF) Stock Jumps 8% After Q4 Beat, But Weak Guidance Clouds the Picture

TLDR

• E.l.f. Beauty beat Q4 estimates, with revenue of $449M vs $423M expected and adjusted EPS of 32 cents vs 29 cents expected.
• The company plans to test lower prices on select products after a $4 price cut on its Halo Glow tint drove a nearly 40% sales lift.
• ELF stock rose roughly 7-8% in after-hours trading following the earnings release.
• Full-year fiscal 2027 guidance came in below Wall Street expectations on both sales and earnings.
• The company flagged a potential $15M–$20M impact from rising oil prices tied to the Iran war, not included in its current guidance.

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E.l.f. Beauty posted a strong fiscal fourth quarter on Wednesday, with revenue of $449 million beating Wall Street’s estimate of $423 million. Adjusted earnings per share came in at 32 cents, topping the 29-cent consensus.

ELF stock climbed around 8% in after-hours trading on the results.

e.l.f. Beauty, Inc., ELF

But the reaction wasn’t all celebration. The company’s fiscal 2027 outlook missed on both the top and bottom lines, which tempered some of the enthusiasm.

E.l.f. expects full-year sales of $1.84 billion to $1.87 billion. The midpoint falls short of the $1.87 billion analysts had expected. Adjusted EPS guidance of $3.27 to $3.32 was well below the $3.61 consensus.

The quarter itself had one complicating factor: a $57.6 million charge tied to the acquisition of Rhode, following stronger-than-expected performance from the brand. That pushed the company to a GAAP net loss of $49.4 million for the quarter. Stripping that out, net income was $19.4 million.

Price Cuts Are Coming

CEO Tarang Amin told CNBC that consumers have been pulling back as higher gas prices and broader cost pressures weigh on spending. Unit sales have softened more than expected in recent months.

The company recently tested a $4 price reduction on its $18 Halo Glow skin tint and saw a nearly 40% lift in sales. That test made it clear just how price-sensitive shoppers are right now.

As a result, E.l.f. plans to roll back some of the price increases it put in place last August, when it raised prices by $1 across its core lineup to offset tariff costs. Additional products will be tested at lower price points going forward.

The company paid about $58.5 million in tariffs and is now working to collect refunds following the Supreme Court’s ruling against the tariffs. CFO Mandy Fields said those refunds, along with cost-saving programs, could help offset the margin impact of price reductions.

Gross margin for the quarter grew 1.4 percentage points to 73%, helped in part by those same price hikes that are now being dialed back.

Rhode Doing the Heavy Lifting

Rhode has become the main engine of E.l.f.’s growth over the past year. Sales at the celebrity brand grew 80%, driven by expansion into Sephora North America, Sephora UK, and Mecca, where it now holds the number one brand position at all three.

This fall, Rhode is set to launch across 19 European countries with Sephora.

E.l.f. also flagged a potential $15 million to $20 million headwind in fiscal 2027 from rising oil prices tied to the U.S.-Israeli war with Iran. That impact has not been included in its current guidance.

Fields said about 75% of E.l.f.’s production comes from China. The company said it is not seeing trade-down behavior from consumers yet, with shoppers continuing to spend on beauty products.

Amin said M&A remains part of the company’s long-term plans, though the focus right now is on organic growth from its existing portfolio.

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