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Investing.com - Canaccord Genuity lowered its price target on e.l.f. Beauty (NYSE:ELF) to $128.00 from $150.00 on Thursday, while maintaining a Buy rating following the company’s first-quarter fiscal 2026 results. According to InvestingPro data, the stock currently trades at a P/E ratio of 55.12, reflecting premium market expectations despite its recent -8.91% weekly decline.
The beauty company reported sales growth of 9.0% year-over-year to $353.7 million for the quarter ended June, slightly above consensus estimates of 8.5% growth. Adjusted earnings per share came in at $0.89, exceeding both Canaccord and Street expectations of $0.84. The company maintains impressive gross profit margins of 70.67%, demonstrating strong pricing power in the competitive beauty market.
International performance remained strong with 30% sales growth despite facing a challenging comparison to 91% growth in the same period last year. U.S. sales increased 5%, improving from the 1% growth reported in the previous quarter.
Tariff pressures from Chinese manufacturing exposure remain a key concern, with gross margins declining 215 basis points in the first quarter. The company expects these pressures to worsen in the second quarter as higher-cost inventory flows through, alongside increased marketing expenses and costs related to the rhode acquisition.
Despite near-term volatility, Canaccord believes e.l.f. Beauty is well-positioned for long-term success as its core brand continues to gain market share both domestically and internationally, while its Naturium brand and newly acquired rhode brand offer significant growth opportunities. InvestingPro data reveals strong revenue growth prospects, with analysts forecasting 26% growth for fiscal 2026. For deeper insights into e.l.f. Beauty’s valuation and growth metrics, subscribers can access the comprehensive Pro Research Report, available exclusively on InvestingPro.
In other recent news, e.l.f. Beauty reported its first-quarter earnings for fiscal year 2026, highlighting a 9% increase in net sales, reaching $354 million. The company achieved an earnings per share of $0.89, surpassing analyst expectations of $0.84. Despite the revenue falling slightly short of some forecasts, the company’s stock price remained stable. Additionally, Morgan Stanley (NYSE:MS) maintained its Equalweight rating on e.l.f. Beauty while raising its price target from $105.00 to $114.00. This adjustment follows the company’s fiscal first-quarter results and the recent acquisition of Rhode. However, there was some investor concern due to a lack of clarity on the quarterly conference call and earnings release. The company chose not to issue guidance amid tariff volatility, and details about the Rhode acquisition were limited. These developments reflect e.l.f. Beauty’s ongoing strategic moves and market performance.
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