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E.l.f. Beauty Inc. concluded its fiscal year 2026 with a powerful fourth quarter, reporting sustained double-digit sales growth fueled by a potent combination of expanding e-commerce channels, strong retail partnerships, and the remarkable ascent of its recently acquired Rhode brand. The beauty conglomerate announced that net sales for the fourth quarter, which ended on March 31, surged by an impressive 35% year-over-year, reaching $449.3 million. This robust performance capped a stellar full fiscal year, with net sales climbing 25% to a significant $1.64 billion, underscoring broad-based growth across both domestic and international retailer and e-commerce platforms.
Despite this overall positive trajectory, E.l.f. Beauty is proactively preparing for targeted price adjustments on certain product lines. This strategic move comes in the wake of demand pressures on its core e.l.f. products, which were impacted by tariff-related price increases implemented in the previous fiscal year. The company’s leadership acknowledged that while these hikes boosted dollar sales, they inadvertently dampened unit volume as consumers became more price-sensitive.
Tarang Amin, CEO and Chairman of E.l.f. Beauty, highlighted on the earnings call that digital channels continue to be a primary engine of growth, though specific e-commerce revenue figures were not disclosed. The company, consistently ranked within the top tier of online retailers, currently holds the No. 328 position in Digital Commerce 360’s Top 1000 Database, a testament to its significant online sales volume in North America.
Rhode Acquisition Fuels Exponential Growth
A significant driver behind E.l.f. Beauty’s accelerated growth in fiscal 2026 has been the rapid integration and performance of the Rhode brand. Acquired in August 2025, the Hailey Bieber-founded beauty brand contributed a substantial $113 million to the fourth-quarter net sales, representing approximately 34 percentage points of the company’s overall growth for the period, according to Chief Financial Officer Mandy Fields. Excluding the impact of Rhode, E.l.f. Beauty’s organic net sales for the fourth quarter saw a more modest increase of about 1% year-over-year.
This acquisition has demonstrably diversified E.l.f. Beauty’s portfolio, which also includes established names like e.l.f. Cosmetics, e.l.f. SKIN, Well People, and Naturium. The strategic move to incorporate Rhode has allowed E.l.f. to tap into a new consumer demographic and leverage the brand’s strong digital presence and celebrity endorsement.
Addressing Core Brand Demand with Price Realignments
As E.l.f. Beauty transitions into fiscal year 2027, the company is keenly aware of the need to revitalize demand for its foundational e.l.f. brand. To counteract the softening in unit sales observed in recent months, Amin announced plans for a series of targeted price reductions across several key product families. This initiative is a direct response to the company’s experience in August 2025, when a universal $1 price increase on core e.l.f. products, intended to offset rising costs and tariffs, led to a decrease in unit sales.
"As a result, we are keenly focused on how to deliver better value and improve unit velocity," Amin stated, emphasizing the company’s commitment to its consumer base. The strategy aims to re-engage price-conscious shoppers and stimulate greater purchase frequency.
Navigating Tariff Pressures and Supply Chain Diversification
The persistent issue of tariffs continues to present a significant challenge for E.l.f. Beauty. Fields reported that the company’s average tariff rate escalated to approximately 55% in fiscal 2026, a considerable jump from the 25% experienced the previous year. For fiscal 2027, E.l.f. is operating under the assumption that tariff rates will stabilize at the current 35% level, which could offer some relief.
In a proactive effort to mitigate these cost pressures and enhance supply chain resilience, E.l.f. has made substantial investments in diversifying its manufacturing base. Over the past three years, production outside of China has dramatically increased, now accounting for over 45% of the company’s total output, up from a mere 1% historically. This strategic shift not only aims to reduce reliance on a single region but also to potentially shorten lead times and improve cost management in the face of global trade complexities.
Digital Channels and Brand Synergy Drive Future Growth
E.l.f. Beauty continues to champion its position as a leader in "connected commerce," leveraging digital platforms for significant growth. Amin pointed to strong performance on major marketplaces such as Amazon and emerging social commerce hubs like TikTok Shop as key indicators of the company’s digital prowess. This multi-channel approach allows E.l.f. to meet consumers where they are, fostering engagement and driving sales across various touchpoints.
While all five brands within the E.l.f. Beauty portfolio demonstrated growth in fiscal 2026, Rhode and Naturium emerged as standout performers. Rhode, in particular, generated $390 million in net sales for the fiscal year, marking an impressive 80% year-over-year increase. On an annualized basis, the brand’s global retail sales have already surpassed the $500 million milestone.
The successful integration of Rhode has involved a strategic expansion beyond its direct-to-consumer (DTC) origins. Following its acquisition, E.l.f. has actively partnered with major beauty retailers like Sephora, significantly broadening Rhode’s accessibility. This retail expansion has proven highly effective, with Rhode achieving the distinction of becoming the number one beauty brand at Sephora North America in fiscal 2026. The brand also celebrated record-breaking product launches with Sephora in the United Kingdom and the Australian beauty retailer Mecca, further solidifying its global appeal.
Naturium, acquired by E.l.f. nearly three years prior, also showcased remarkable performance, generating nearly $250 million in global retail sales. This represents a doubling of its sales volume prior to the acquisition and positions Naturium as one of the fastest-growing brands among the top 50 skincare brands in the fourth quarter. E.l.f. SKIN also contributed significantly, with approximately $200 million in global retail sales in fiscal 2026.
Amin underscored the transformative impact of these strategic acquisitions, stating, "Our acquisitions of Rhode and Naturium have meaningfully diversified our business across brands, categories, and supply chain. Over the past three years, we’ve seen non-e.l.f. brand sales increase from 0% to 30% of our global consumption." This diversification strategy has broadened E.l.f. Beauty’s market reach and reduced its reliance on any single brand.
Global Expansion and International Market Potential
E.l.f. Beauty’s growth trajectory is not confined to its domestic market. The company reported a substantial 75% surge in international net sales during the fourth quarter, contrasting with a 26% rise in U.S. net sales. This rapid international expansion is a key focus for the company, which believes it is still in the early stages of realizing its global potential. Currently, international sales constitute approximately 20% of net sales, a figure that E.l.f. aims to increase significantly, especially when compared to the more than 70% international sales proportion typical of established beauty industry giants.
Amin expressed optimism about the global market, noting, "There’s a significant pent-up global appetite for our brands. 50% of e.l.f. brand social followers are outside the U.S., and 74% of Rhode followers are outside the U.S." This data highlights a substantial untapped market and a clear opportunity for E.l.f. to expand its footprint and brand recognition internationally.
Strategic Price Adjustments and Innovation Focus
The recent slowdown in global consumption for the core e.l.f. brand, which has moved from high-single-digit growth to low-single-digit growth over the past 12 weeks, has prompted the company to re-evaluate its pricing strategy. This softening followed the August 2025 price adjustment aimed at offsetting inflationary pressures and tariff costs. While the price increase initially boosted dollar sales, it led to a decline in unit volume.
In response, E.l.f. has initiated pilot programs for targeted price reductions. A notable example is the reduction of the Halo Glow Skin Tint’s price from $18 to $14. Early results from this adjustment have been highly encouraging, with a 38% increase in sales on Amazon and a 36% surge across all retail channels, including a remarkable triple-digit sales increase on TikTok Shop. "Given these results, we’re exploring other pricing opportunities to deliver value to our community," Amin stated, indicating a potential broader rollout of this strategy.
Beyond pricing adjustments, E.l.f. is also prioritizing innovation, international market penetration, and strengthening its market share in key overseas regions such as the United Kingdom, Canada, and Germany. This multi-faceted approach aims to ensure sustained growth and competitiveness.
Rhode’s European Debut and E.l.f.’s Financial Outlook
Looking ahead to fiscal year 2027, E.l.f. Beauty projects net sales growth of 12% to 14%. The Rhode brand is expected to contribute approximately 9 percentage points to this growth, before its sales are fully integrated into the company’s organic sales figures later in the fiscal year.
A pivotal component of this international expansion plan is Rhode’s upcoming launch in Europe through Sephora in September. This move will introduce the brand to Sephora stores and online platforms across 19 European markets, including France, Germany, Italy, Spain, Sweden, and Turkey. Sephora, a division of LVMH, is a significant player in the European retail 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 the vast potential given its presence in less than 20% of Sephora’s global stores. The primary challenge, he admitted, has been meeting the overwhelming consumer demand.
E.l.f. anticipates that lower projected tariff costs and the earlier price increases will positively impact gross margins, particularly in the first half of fiscal 2027. However, these benefits are expected to be partially offset by the ongoing expansion of Rhode into broader retail channels.
The company is also closely monitoring external cost factors. Fields indicated that a sustained average oil price of approximately $100 per barrel could lead to an additional $15 million to $20 million in cost headwinds for E.l.f. in fiscal 2027. To counter these potential pressures, E.l.f. is actively pursuing internal cost-saving initiatives and seeking $58.5 million in refunds for tariffs paid in the previous year. Amin confirmed that any recovered tariff funds would be strategically reinvested into value-enhancement and unit-growth efforts.
Portfolio Refinement and Leadership Enhancements
In parallel with its growth strategies, E.l.f. Beauty is undertaking a consolidation of its brand portfolio and bolstering its leadership team. The company recently transitioned the Keys Soulcare brand back to its co-founder, Alicia Keys, allowing E.l.f. to concentrate its resources on its five core brands.
To spearhead the expansion of the e.l.f. brand across diverse categories and geographies, Kory Marchisotto has been appointed President of e.l.f. Brands. Oshiya Savur has also joined as Chief Marketing Officer of e.l.f. Brands. Furthermore, Ekta Chopra has been named Chief Digital and AI Officer, a newly created position recognizing the integral role of technology and artificial intelligence in driving future growth and transformation within the company. Chopra’s extensive experience in leading E.l.f.’s digital evolution, including its recent SAP upgrade, positions her to guide the company’s technological advancements. Amin emphasized that technology and AI are viewed as "core drivers of transformation and growth" for E.l.f. Beauty.
