e.l.f. Beauty (ELF) Q1 2026 earnings summary

Executive summary

• Achieved 26th consecutive quarter of net sales growth and market share gains, with Q1 net sales up 9% year-over-year to $353.7 million, driven by strong retailer and e-commerce channels in the US and internationally.

• Adjusted EBITDA rose 12% to $87.1 million, with adjusted net income at $51.3 million and adjusted EPS at $0.89, though net income declined to $33.3 million due to higher taxes and SG&A.

• Gross margin declined by 215 basis points to 69%, mainly due to higher tariff costs, partially offset by favorable FX and mix.

• Completed the $800 million acquisition of rhode in August 2025, funded by a $600 million term loan and $200 million in stock, with up to $200 million earnout possible.

• Ended the quarter with $170 million in cash and $243.3 million in available revolving credit.

Financial highlights

• Q1 net sales reached $353.7 million, with US sales up 5% to $284.6 million and international sales up 30% to $69.1 million.

• Gross profit was $244.5 million, up 6% year-over-year; operating income was $48.7 million, down from $50.7 million year-over-year.

• SG&A expenses increased to $195.8 million (55% of net sales), with adjusted SG&A at 50% of net sales.

• Free cash flow was $20 million, up from $0.5 million a year ago; cash flow from operations was $27.2 million.

• Adjusted EBITDA margin was 24.6% in Q1; net income margin was 9.4% (GAAP basis).

Outlook and guidance

• No full-year Fiscal 2026 outlook provided due to tariff uncertainties; first-half net sales growth expected to exceed Q1’s 9%.

• Adjusted EBITDA margins are expected to be approximately 20% in the first half, reflecting higher tariffed COGS, marketing spend timing, and rhode integration.

• If tariffs remain at the incremental 30% level, the estimated annualized gross impact to COGS is $50 million.

• Raised global product prices effective August 1, 2025, to offset ongoing and new tariffs.

• Management expects to fund ongoing needs from cash, operations, and available credit; liquidity considered adequate for the next twelve months.