Key Highlights

  • Quarterly sales for the fiscal second quarter ended September 30, 2026 reached USD 520.8 million, a 51% jump that extends the run to 31 straight quarters of expansion.
  • Diluted EPS under GAAP came to USD 0.50 on USD 30.0 million of net income, whereas the adjusted figure of USD 1.21 rests on USD 72.7 million of adjusted net income.
  • Adjusted EBITDA climbed 86% to USD 123.4 million, equal to 24% of sales, and gross Margin widened by roughly 160 basis points to 71%.
  • Guidance for fiscal 2027 net sales now spans USD 2,003 million to USD 2,029 million, up from USD 1,938 million to USD 1,968 million, and the adjusted diluted EPS range sits at USD 3.82 to USD 3.86.

Cost Growth and a Contingent Payment Explain the Gap

e.l.f. Beauty (NYSE:ELF) released its fiscal 2027 second-quarter numbers on November 4, 2026. Its portfolio covers cosmetics, skin care and hair items sold under e.l.f. Cosmetics, rhode, Naturium and Well People. Selling, general and administrative outlays rose USD 69.0 million to USD 300.1 million, roughly 57.6% of sales (calculated). Marketing, merchandising, distribution, staff pay and Depreciation together drove much of that climb. A USD 17.7 million Fair Value adjustment on the rhode earnout added to the burden, because that brand's sales ran ahead of the payout hurdles. Non-GAAP Net Income exceeded the GAAP figure by USD 42.7 million (calculated). Other income and expense netted to USD 0.6 million of income, against USD 1.9 million of expense in the same quarter last year, and the release does not provide prior-year net income.

Tariff Refunds Shape the Gross Margin Picture

Gross margin rose roughly 160 basis points to 71% in the quarter. Around 30 basis points of that came from supplemental IEEPA Tariff refunds posted to cost of sales. The remainder stemmed from reduced tariffs compared with a year earlier and a better product mix, with some offset from pricing investments. Across the first half, sales expanded 43% to USD 1,000.2 million, and the 77% six-month gross margin contained roughly 520 basis points attributable to tariff refunds. Half-year GAAP net income reached USD 96.6 million, or USD 1.61 per diluted share, while adjusted EPS was USD 2.96 and adjusted EBITDA totaled USD 291.6 million, or 29% of sales.

Fiscal 2027 Targets Move Higher as Leverage Eases

Management lifted its expected sales growth to a range of 22% to 24%, from an earlier 18% to 20%. Adjusted EBITDA is now projected at USD 421 million to USD 427 million, compared with the prior USD 401 million to USD 407 million, and adjusted net income at USD 231 million to USD 233 million against USD 212 million to USD 215 million before. The adjusted tax rate stays between 25% and 26%, and the diluted share count is forecast at 60.5 million. At the close of the quarter cash came to USD 350.8 million, up from USD 194.4 million a year earlier, while total Debt stood at USD 826.7 million, down from USD 856.7 million. Adjusted measures strip out stock compensation, earnout revaluations and intangible amortization, which is why they sit well above GAAP.

Where Things Stand

Largely because costs and non-cash items absorbed much of the growth. e.l.f. Beauty (NYSE:ELF) lifted net sales 51%, yet reported GAAP EPS of USD 0.50 after higher selling costs and the USD 17.7 million rhode earnout charge, against adjusted EPS of USD 1.21. Tariff refunds also flattered six-month margins. With guidance raised, the next markers are fiscal third-quarter sales, whether gross margin holds once refunds fade and any further earnout changes tied to rhode.