Elf Beauty Lifts Full-Year Forecast as Value-Priced Cosmetics Drive Sales

Elf Beauty Inc. raised its annual sales and profit forecast, signaling continued momentum as consumers flock to its affordable makeup and skincare products amid persistent inflationary pressures.

Quarterly Performance Surpasses Estimates

For the first quarter ended June 30, the company reported a 36% increase in net sales to $479.4 million, comfortably beating the average analyst estimate of $429.5 million, according to LSEG data. Elf's performance was even stronger on the bottom line, with adjusted profit of $1.75 per share, more than double the consensus estimate of 71 cents.

The company also saw a significant expansion in its gross margin, which increased by 1,400 basis points. A substantial portion of this gain, 1,050 basis points, was attributed to tariff refunds, the company said.

Upgraded Outlook and Pricing Strategy

Buoyed by the strong results, Elf now expects fiscal 2027 net sales to be between $1.94 billion and $1.97 billion, an increase from its prior projection of $1.84 billion to $1.87 billion. The company also lifted its annual adjusted profit guidance to a range of $3.50 to $3.55 per share, up from a previous forecast of $3.27 to $3.32.

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The company's success stems from its focus on value, with about 75% of its products priced at $10 or less. Chief Financial Officer Mandy Fields told Reuters that Elf is "continuing to highlight value for our consumers" and even lowered prices on 10% of its portfolio during the quarter to drive volumes.

International Expansion a Key Focus

Elf sees significant room for growth outside the United States, which currently accounts for only 20% of its sales, compared to over 70% for some competitors. "It’s a big white space opportunity for us," Fields said.

As part of its expansion, the company plans to launch its recently acquired Rhode brand in 19 European countries next month. Additionally, the core Elf brand will be introduced in Brazil, with both initiatives leveraging a partnership with beauty retail giant Sephora.