E.l.f. Beauty boosts annual sales forecast to $2 billion after 51% quarterly jump

E.l.f. Beauty posted a 51% increase in net sales for the second fiscal quarter, a performance that propelled the company to its 31st consecutive quarter of growth. The revenue surge was driven by gains in both retail and e-commerce channels, with strong results recorded in domestic and international markets alike.

CEO Tarang Amin stated that every brand within the portfolio contributed to the quarter's success. The company is currently the most-searched brand on TikTok Shop and ranks second for cosmetics on that platform. Amin also identified Rhode, a skincare brand acquired last year, as a key driver of this momentum.

Following the beat on market expectations, E.l.f. raised its full fiscal-year guidance. The company now projects net sales between $2 billion and $2.03 billion, up from a previous estimate of $1.94 billion to $1.97 billion. The adjusted EBITDA forecast was increased to a range of $421 million to $427 million, surpassing the earlier projection of $401 million to $407 million.

Expectations for adjusted earnings per share were adjusted to a range of $3.82 to $3.86, exceeding the prior guidance of $3.50 to $3.55. Net income is expected to fall between $231 million and $233 million, a rise from the previous range of $212 million to $215 million. This marks the second time in two quarters that the company has raised its outlook after exceeding internal targets.

For the quarter ending September 30, E.l.f. reported net income of $30.03 million, or 50 cents per share. This figure is a substantial increase from the roughly $3 million, or 5 cents per share, reported during the same period last year. Actual revenue of $520.8 million exceeded the $470.3 million estimated by analysts in an LSEG survey, while adjusted earnings per share of $1.21 far outpaced the expected 60 cents.

International expansion was a particularly bright spot, with business in those channels growing by 165%. Amin noted that only 25% of the company's total business currently originates outside the United States. The company also reported a 1.6% increase in gross margin, which included a 0.3% benefit from tariff refunds. E.l.f. expects to receive a total of approximately $55 million in refunds for the year.

Leveraging these tariff benefits, the company lowered the price of about 10% of its units by one dollar. Amin indicated that this strategic move resulted in strong unit momentum, helping to drive the overall sales increase. The company expects high sales volumes through the end of the year.