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E.l.f. Beauty Inc. concluded fiscal year 2026 with a strong performance, marked by significant double-digit sales growth across its diverse portfolio, propelled by a robust e-commerce strategy and the remarkable ascent of its acquired Rhode brand. The beauty conglomerate achieved net sales of $449.3 million in the fourth quarter, a substantial 35% increase year-over-year, and closed the full fiscal year with a commendable 25% surge in net sales, reaching $1.64 billion. This impressive financial trajectory was underpinned by broad-based gains in both its domestic and international retail and e-commerce channels.
Despite this overall success, the company is strategically recalibrating its pricing for its foundational e.l.f. products. This move comes as a response to the impact of previous tariff-related price increases, which had demonstrably tempered consumer demand for its core offerings. The company’s proactive approach highlights a delicate balance between expanding its market reach and addressing price sensitivity within its established customer base.
Rhode’s Meteoric Rise and Strategic Acquisition Impact
A pivotal driver of e.l.f. Beauty’s recent financial triumphs has been the integration and rapid expansion of the Rhode brand. Acquired by e.l.f. in August 2025, the Hailey Bieber-founded skincare and beauty line has swiftly become a cornerstone of the company’s growth strategy. In the fourth quarter of fiscal 2026, Rhode alone contributed $113 million to net sales, accounting for approximately 34 percentage points of the company’s overall quarterly growth. This significant contribution underscores the strategic foresight behind the acquisition and Rhode’s immediate impact on e.l.f. Beauty’s financial performance.
Excluding the substantial impact of Rhode, e.l.f. Beauty’s organic net sales for the fourth quarter saw a more modest increase of approximately 1% year-over-year. This figure accentuates the transformative effect of Rhode’s inclusion and the company’s diversification efforts.
Addressing Core Brand Challenges and Future Outlook
While the company celebrates its overall growth, the core e.l.f. brand is facing headwinds as it enters fiscal year 2027. To reignite unit demand, CEO and Chairman Tarang Amin announced plans for targeted price reductions across several product lines in the coming weeks. This strategic pivot follows a $1 price increase implemented across all e.l.f. brand SKUs in August 2025. While this earlier price hike successfully boosted dollar sales, it concurrently led to a decline in unit volume as consumers curtailed their purchases.
"As a result, we are keenly focused on how to deliver better value and improve unit velocity," Amin stated during the earnings call, signaling a commitment to re-engaging price-conscious consumers.
Navigating Tariff Pressures and Supply Chain Diversification
The persistent challenge of tariffs continues to exert pressure on e.l.f. Beauty’s operational costs. Chief Financial Officer Mandy Fields reported that the company’s average tariff rate escalated to approximately 55% in fiscal year 2026, a marked increase from the 25% recorded the previous year. For fiscal year 2027, e.l.f. Beauty is projecting a stabilization of tariff rates at the current 35% level, which could offer some measure of relief.
In a significant strategic move to mitigate tariff impacts and enhance supply chain resilience, e.l.f. Beauty has aggressively diversified its manufacturing base. Over the past three years, production outside of China has surged from a mere 1% to over 45% of the company’s total output. This diversification not only addresses tariff concerns but also positions the company to better navigate global supply chain complexities and potential geopolitical disruptions.
Digital Channels as Engines of Growth
E.l.f. Beauty continues to leverage its strong presence in digital channels, reinforcing its position as a leader in "connected commerce." The company reported outstanding performance on major platforms such as Amazon and TikTok Shop, underscoring the effectiveness of its integrated digital strategy.
Amin highlighted that while all five brands within the e.l.f. Beauty portfolio experienced growth in fiscal year 2026, Rhode and Naturium stood out with particularly robust expansion.
Rhode’s Retail Domination and Global Expansion
Rhode’s trajectory has been nothing short of extraordinary. In fiscal year 2026, the brand generated $390 million in net sales, achieving an impressive 80% year-over-year increase. On an annualized basis, Rhode’s global retail sales surpassed the $500 million mark, demonstrating its substantial market penetration.
The brand’s success is largely attributable to e.l.f. Beauty’s strategic expansion of Rhode beyond its direct-to-consumer (DTC) origins. Post-acquisition, e.l.f. has successfully integrated Rhode into major retail channels, most notably through a significant partnership with Sephora and other key retail partners. This expansion has propelled Rhode to become the number one beauty brand at Sephora North America in fiscal year 2026. Furthermore, the brand achieved record-breaking product launches with Sephora in the United Kingdom and with the Australian and New Zealand beauty retailer Mecca, signaling its growing global appeal.
A Diversified Portfolio Yielding Strong Returns
Beyond Rhode, e.l.f. Beauty’s expanded portfolio continues to deliver substantial value. E.l.f. SKIN achieved approximately $200 million in global retail sales during fiscal year 2026. Naturium, acquired by e.l.f. nearly three years prior, generated close to $250 million in global retail sales, effectively doubling its pre-acquisition figures. Amin noted that Naturium emerged as the fastest-growing brand among the top 50 skincare brands in the fourth quarter, further validating the company’s acquisition strategy.
"Our acquisitions of Rhode and Naturium have meaningfully diversified our business across brands, categories, and supply chain," Amin emphasized. "Over the past three years, we’ve seen non-e.l.f. brand sales increase from 0% to 30% of our global consumption." This strategic diversification not only broadens e.l.f. Beauty’s revenue streams but also enhances its resilience against market fluctuations impacting individual brands.
International Growth Surges as Global Ambitions Take Flight
The company’s growth narrative extends robustly across international markets. In the fourth quarter of fiscal year 2026, U.S. net sales increased by 26%, while international net sales experienced a dramatic surge of 75%. Amin pointed out that e.l.f. Beauty is still in the nascent stages of its global expansion, with international sales currently representing about 20% of total net sales. This figure, while growing, lags behind the more than 70% international revenue share typically seen by legacy beauty industry peers, indicating significant untapped potential.
"There’s a significant pent-up global appetite for our brands," Amin stated, citing that 50% of e.l.f. brand social media followers are located outside the U.S., and a remarkable 74% of Rhode followers reside internationally. This data underscores the immense opportunity for continued global market penetration.
Strategic Price Adjustments for Core e.l.f. Brand
Analyzing the recent performance of the core e.l.f. brand, global consumption has moderated from high-single-digit growth in fiscal year 2026 to low-single-digit growth over the past 12 weeks. Furthermore, spring product launches did not meet internal expectations, prompting a closer examination of market dynamics.
The prior $1 price increase on all e.l.f. brand SKUs in August 2025, implemented to offset rising costs including tariffs and inflation, led to an increase in dollar sales but a decrease in unit sales. This consumer reaction has prompted e.l.f. to test targeted price reductions. A recent example includes lowering the price of the popular Halo Glow Skin Tint from $18 to $14. Early results from this adjustment have been highly encouraging, with a reported 38% sales lift on Amazon and a 36% increase across all retailers, including a triple-digit sales surge on TikTok Shop.
"Given these results, we’re exploring other pricing opportunities to deliver value to our community," Amin remarked, indicating a data-driven approach to optimizing pricing strategies. Beyond pricing, e.l.f. is also focusing on enhancing product innovation, accelerating international expansion, and strengthening its market share in key overseas territories such as the United Kingdom, Canada, and Germany.
Rhode’s European Debut and Ongoing Tariff Management
Looking ahead to fiscal year 2027, e.l.f. Beauty projects net sales growth between 12% and 14%. Rhode is anticipated to contribute approximately 9 percentage points to this growth, before its financials are fully integrated into the company’s organic sales reporting later in the fiscal year.
A significant milestone for Rhode in fiscal year 2027 will be its expansion into Europe through a partnership with Sephora. The brand is slated to launch in Sephora stores and online across 19 European markets, including France, Germany, Italy, Spain, Sweden, and Turkey, commencing in September. This rollout will introduce Rhode to Sephora’s extensive European customer base. Sephora, a division of LVMH, is a prominent player in the European e-commerce landscape, ranking as the second-largest online retailer in Digital Commerce 360’s Europe Database.
Amin expressed confidence in Rhode’s continued strong growth, noting that with Rhode present in less than 20% of Sephora’s global stores, "we see tremendous opportunity in the coming years." He added, "The biggest issue we’ve had on Rhode is keeping up with consumer demand."
Fiscal Year 2027 Projections and Cost Considerations
For fiscal year 2027, e.l.f. Beauty anticipates that lower tariff costs and the strategic price increases implemented earlier will bolster gross margins, particularly in the first half of the fiscal year. However, Fields cautioned that these benefits are expected to be partially offset by the ongoing integration of Rhode into a broader retail footprint.
The company is also closely monitoring transportation and commodity costs. Fields indicated that if oil prices average around $100 per barrel, e.l.f. Beauty could face additional cost headwinds ranging from $15 million to $20 million in fiscal year 2027.
To counter these potential pressures, e.l.f. Beauty is implementing internal cost-saving measures and actively pursuing $58.5 million in refunds for tariffs paid in the previous year. Amin indicated that if these refunds are secured, a portion will be reinvested into value-enhancement and unit-growth initiatives. Furthermore, the company plans to allocate capital towards brand development, technological advancements, including artificial intelligence (AI) and automation, and infrastructure enhancements to support its global retail expansion.
Portfolio Streamlining and Leadership Enhancements
In parallel with its growth initiatives, e.l.f. Beauty is strategically refining its brand portfolio and bolstering its leadership team to better support its strategic objectives. The company recently decided to transition the Keys Soulcare brand back to its co-founder, Alicia Keys. This move allows e.l.f. Beauty to concentrate its resources and strategic focus on its five core brands.
To further strengthen the e.l.f. brand, the company has created a new leadership role. Kory Marchisotto, formerly Global Chief Marketing Officer, has been appointed President of e.l.f. Brands. In this capacity, Marchisotto will spearhead the expansion of the e.l.f. brand across new categories and geographies. Oshiya Savur has been named Chief Marketing Officer of e.l.f. Brands, reinforcing the marketing leadership.
Additionally, Ekta Chopra has been appointed Chief Digital and AI Officer, another newly established position. Chopra’s tenure at e.l.f. has been marked by her leadership in the company’s digital transformation, including its recent SAP upgrade. Amin highlighted the significance of this role, stating, "Her new role reflects how we see the future," underscoring e.l.f. Beauty’s view of technology and AI as "core drivers of transformation and growth" across the entire organization. This strategic realignment of leadership and brand focus positions e.l.f. Beauty for continued innovation and market leadership in the dynamic beauty industry.
