February 5, 2026
Finance

E.l.f. Beauty Surpasses Q3 Expectations, Elevates Full-Year 2026 Financial Forecast

Despite Strong Earnings and Upgraded Guidance, Market Response Dips

Loading...
Loading quote...

Summary

E.l.f. Beauty, Inc., a leading cosmetics company, reported robust third-quarter results that exceeded analyst estimates both for earnings per share and revenue. The firm also improved its adjusted earnings guidance and revenue outlook for the fiscal year 2026. Nonetheless, the company's stock price declined modestly following the release of its financial report.

Key Points

E.l.f. Beauty reported adjusted EPS of $1.24 in Q3, beating estimates significantly.
Q3 revenue rose 38% year-over-year to $489.50 million, outperforming expectations.
Fiscal 2026 adjusted EPS guidance was raised to $3.05-$3.10, above consensus.
Adjusted EBITDA increased 79%, reaching 25% of net sales, indicating stronger profitability.

E.l.f. Beauty, Inc. (NYSE: ELF) experienced a notable shift in its stock price following the release of its third-quarter financial results and an updated fiscal-year guidance. Initially, the shares traded higher but reversed course and declined after the company posted results surpassing market expectations and raised its forecasts for fiscal 2026, in a post-market announcement on Wednesday.


During the third quarter, E.l.f. reported adjusted earnings per share (EPS) of $1.24, considerably outperforming the consensus estimate, which stood at $0.72. In tandem, the company's revenue reached $489.50 million, eclipsing the estimated figure of $459.10 million. This revenue growth was driven by an impressive 38% increase in net sales compared with the same period of the previous year.

The sales expansion originated from broad-based growth both through retailer partnerships and e-commerce platforms within the United States and international markets. While achieving this sales momentum, E.l.f. encountered a contraction in gross margin to 71%. The decrease was primarily attributed to elevated tariff expenses. However, these higher costs were partly offset by beneficial pricing strategies and favorable product mix adjustments.

The company’s profitability metrics also showed strong year-over-year improvement. Adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) surged by 79%, reaching $123.0 million, which represented 25% of net sales for the quarter. Meanwhile, GAAP net income was recorded at $39.4 million, with an adjusted net income measure totaling $74.5 million.


Reflecting confidence in its operational performance and market positioning, E.l.f. updated its fiscal year 2026 guidance, raising the expected adjusted EPS range from $2.80–$2.85 previously to $3.05–$3.10. This revised outlook surpassed the analyst consensus forecast of $2.87 per share. Correspondingly, the company increased its revenue guidance for the year from a prior span of $1.55 billion to $1.57 billion up to a revised range of $1.60 billion to $1.61 billion. This represents an upward adjustment relative to the consensus estimate of $1.56 billion.

Despite these robust financial results and an optimistic forward view, the market reacted with a decline in E.l.f.'s stock price. At the time of reporting, ELF shares were trading down approximately 4.14%, at around $81.13, based on data from Benzinga Pro.


Overall, E.l.f. Beauty’s third-quarter performance demonstrates effective revenue growth both domestically and internationally, driven by diverse distribution channels. Even though margin pressures were evident due to increased tariffs, the company leveraged pricing and assortment strategies to partially cushion this impact. The material upward revision to annual guidance signals management’s positive outlook on continued growth and profitability in fiscal year 2026.

Nevertheless, the market’s subdued reaction as indicated by the share price movement suggests investor caution or profit-taking despite the fundamental strength apparent in the earnings report and guidance enhancement.


Key Points

  • E.l.f. Beauty delivered an adjusted EPS of $1.24 in Q3, significantly exceeding the analyst consensus of $0.72.
  • Revenue for the quarter increased 38% year-over-year to $489.50 million, ahead of the expected $459.10 million.
  • The company raised its fiscal-year 2026 adjusted EPS guidance to a range of $3.05 to $3.10, above the market forecast of $2.87.
  • Adjusted EBITDA grew 79% year-over-year, representing 25% of net sales, underlining improved operational profitability.

Risks and Uncertainties

  • Gross margin contraction to 71% due to rising tariff costs may persist, exerting pressure on profitability.
  • Despite positive financial metrics, the stock price reaction suggests potential market volatility or investor concerns.
  • Future revenue and earnings depend heavily on consumer demand across both domestic and international channels, which could fluctuate.
Risks
  • Gross margin fell to 71% due to tariff pressures, which may affect future margins.
  • Stock price declined despite strong results, reflecting potential market uncertainty.
  • Reliance on continued growth in diverse retail and e-commerce channels poses execution risks.
Disclosure
Education only / not financial advice
Search Articles
Category
Finance

Financial News

Ticker Sentiment
ELF - neutral
Related Articles
Aramark Stock Rises Following Better-Than-Expected Quarterly Results and Positive Business Outlook

Shares of Aramark (NYSE: ARMK) advanced notably after the company reported first-quarter earnings th...

Fiserv Posts Strong Q4 2025 Earnings, Stock Climbs Amid Investor Optimism

Fiserv reported fourth quarter 2025 results that exceeded analyst expectations, with revenue of $5.3...

Edgewell Personal Care Sees Mixed Q1 Results, Analysts Lift Price Targets

Edgewell Personal Care Company reported a mixed financial performance for the first quarter, deliver...

DuPont Reports Stable Q4 Sales with Strong Earnings Beat, Shares React Positively

DuPont de Nemours, Inc. released its quarterly and full-year financial results showing steady sales ...

Zillow Faces Stock Decline Following Quarterly Earnings That Marginally Beat Revenue Expectations

Zillow Group Inc recent quarterly results reflect steady revenue growth surpassing sector averages b...

Becton Dickinson Faces Market Headwinds Amid Transition and Revised Earnings Projections

Becton Dickinson & Co. posted first-quarter earnings above analyst expectations but trimmed its fisc...