Elf Beauty Bets on Value as Tariffs Ease Pricing Amid Q4 Beat
E.l.f. Beauty beat revenue and adjusted earnings expectations in fiscal Q4 2026 as it warned that tariff-driven price hikes are weighing on volumes and said it will test lower pricing on select products (including a $4 cut on Halo Glow) to reinforce value amid higher costs. The quarter showed a GAAP loss driven by $57.6 million related to its Rhode acquisition, though adjusted earnings were solid and gross margin rose to 73%. Management expects a roughly $55 million tariff refund to offset margins, but fiscal 2027 guidance remains below consensus with projected sales of $1.84–$1.87 billion and adjusted EPS of $3.27–$3.32. Rhode has been the growth engine, expanding into Sephora channels and Europe, with potential for more balanced growth and possible future M&A as the company focuses on organic growth and brand expansion.