Yesterday, Elf Beauty reported strong first-quarter results, but warned of margin pressure in the first half of fiscal 2026 due to rising tariff costs. The company said its net sales increased 9% to $353.7 million, primarily driven by strength in both our retailer and e-commerce channels, in the US and internationally.
In the three months that ended on June 30, E.l.f.’s net income fell to $33.3 million, down 30% from $47.6 million a year ago. The company, which sources about 75% of its products from China, compared to nearly 100% in 2019, also declined to provide a full-year revenue guide, citing the “wide range of potential outcomes” related to the new duties.
It expects its adjusted EBITDA margin to narrow to about 20%, down from 23% in the same period a year earlier. Shares fell around 11% in after-hours trading following the update, with the company declining to provide a full-year forecast for the second consecutive time.
The company has also implemented a $1 price increase across its brands, including newly acquired Rhode, Hailey Bieber’s makeup line, in line with broader industry trends.
Despite cost pressures and uncertainty stemming from U.S. trade policies in Southeast Asia, Elf has maintained strong sales momentum across both retail and online channels. The company’s vegan lip oils and blush tints continue to see high demand at major retailers such as Target, Walgreens, and Dollar General.
