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NEW YORK - e.l.f. Beauty (NYSE:ELF) shares plunged 20% after the cosmetics company reported second-quarter revenue that fell short of analyst expectations and issued disappointing guidance for fiscal 2026.
The beauty brand posted revenue of $343.9 million for the quarter ended September 30, 2025, representing a 14% YoY increase but missing the consensus estimate of $367.95 million. Adjusted earnings per share came in at $0.68, beating analyst expectations of $0.57. The company reported its 27th consecutive quarter of net sales growth, driven by expansion in both retail and e-commerce channels in the U.S. and internationally.
"Our Q2 results, which included 140 basis points of market share gains for our namesake e.l.f. brand and a record-breaking launch of rhode in Sephora North America, are a continuation of the consistent, category-leading growth we’ve delivered over the past 27 quarters," said Tarang Amin, e.l.f. Beauty’s Chairman and Chief Executive Officer.
Despite the positive tone from management, investors were clearly disappointed by the revenue miss and the company’s outlook. e.l.f. Beauty projected fiscal 2026 revenue of $1.55-1.57 billion, below the consensus estimate of $1.65 billion. The company also forecast adjusted earnings of $2.80-$2.85 per share for the year, significantly lower than analyst expectations of $3.53.
Gross margin decreased approximately 165 basis points to 69% in the quarter, primarily due to higher tariff costs, though this was partially offset by benefits from pricing and mix. Adjusted EBITDA was $66.2 million, or 19% of net sales, down 4% from the same period last year.
The company ended the quarter with $194.4 million in cash and cash equivalents, compared to $96.8 million a year earlier, while long-term debt increased to $831.6 million from $156.6 million in the prior-year period.
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