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E.l.f. Beauty Misses Q2 Sales, Sets 2026 Outlook Below Street as Tariffs Weigh

Investors focused on margin pressure despite Rhode’s breakout at Sephora.

Overview

  • Net sales rose 14% to $343.9 million for the quarter ended Sept. 30, falling short of the roughly $366 million analysts expected.
  • E.l.f. guided full‑year fiscal 2026 revenue to $1.55–$1.57 billion (18%–20% growth) and adjusted EPS to $2.80–$2.85, both below consensus.
  • Shares dropped about 19% in after‑hours trading following the results and outlook.
  • The company expects more than $50 million in tariff costs this year, reported a 165‑basis‑point gross‑margin decline to 69%, and raised prices by $1 in August with no further increases planned.
  • Rhode is forecast to add about $200 million to fiscal‑year sales and roughly $300 million on an annualized basis after a record Sephora North America launch, with a UK debut slated for Nov. 10.