On August 6, U.S.-based beauty company e.l.f. Beauty announced its financial results for the first quarter of fiscal year 2026, ending June 30, 2025. Net sales rose 9% year-over-year to $353.7 million, marking the company’s 26th consecutive quarter of both net sales and market share growth. This steady upward trajectory further cements e.l.f. Beauty’s growing presence in the beauty industry.
Commenting on the strong performance, Tarang Amin, Chairman and CEO, stated: “Our strong Q1 results, including 210 basis points of market share gains, are a continuation of the consistent, category-leading growth we’ve delivered over the past 26 quarters. The combination of our value proposition, powerhouse innovation and disruptive marketing engine continue to fuel our results. We remain excited by the significant whitespace we see ahead as we strive to make the best of beauty accessible for all.”
Sales remained robust across both retail and e-commerce channels, driven by continued expansion in domestic and international markets. Adjusted EBITDA increased 12% year-over-year to $87.1 million, representing a healthy 25% margin. However, the gross margin declined to 69%, down approximately 215 basis points from the prior year due to increased tariff-related costs.
Selling, general, and administrative expenses (SG&A) increased from the previous year, reflecting strategic investments in marketing, digital initiatives, and visual merchandising, all aimed at strengthening the brand’s market position.
rhode Acquisition Boosts Gen Z Strategy
On the strategic front, e.l.f. Beauty officially announced in May the acquisition of rhode, a skincare brand founded by model and entrepreneur Hailey Bieber. The deal is valued at up to $1 billion, comprising $800 million in cash and stock, with an earnout of up to $200 million based on performance over the next three years. The acquisition is expected to close later this year and will be financed through $600 million in new debt, with certain shares subject to lock-up restrictions.
Rhode is widely recognized as a Gen Z favorite, gaining strong traction among younger consumers. With this acquisition, e.l.f. Beauty aims to further diversify its brand portfolio and bolster its strategic advantage. By combining its mass-market presence with the cultural influence of digitally native celebrity-led brands, e.l.f. is crafting a hybrid growth strategy that could serve as a powerful driver of future expansion.
Outlook and Growth Opportunities
Looking ahead, the company expects revenue growth in the first half of FY2026 to exceed the 9% posted in Q1, although adjusted EBITDA margin is anticipated to temporarily decline from 23% to around 20%, primarily due to rising tariff costs.
e.l.f. Beauty has long positioned itself as an accessible brand rooted in affordability and clean beauty principles, with a focus on resonating with younger consumers and expanding into emerging markets. Recent investments in the skincare segment—including e.l.f. SKIN and Naturium—reflect the brand’s commitment to growth across categories.
The latest earnings results demonstrate the effectiveness of this integrated strategy and indicate that e.l.f. Beauty is entering its next phase of brand evolution, building on its consistent momentum to pursue long-term, sustainable growth.
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