e.l.f. Beauty Inc. (NYSE:ELF) reported impressive financial results for the second quarter of 2025, with net sales reaching $344 million, a notable increase of 14% compared to the same period last year. This growth marks the company’s 27th consecutive quarter of increasing sales, underscoring e.l.f.’s robust market presence.
The acquisition of Rhode significantly bolstered the company’s performance, contributing $52 million to net sales, which accounted for approximately 17 percentage points of the overall increase. Furthermore, e.l.f. Beauty continues to lead in the U.S. mass cosmetics and skincare sectors, with its brand experiencing a growth rate of 7%, considerably outpacing the category growth.
Despite these positive developments, the company faced challenges. Organic net sales, excluding the Rhode contribution, fell by about 3%, indicating some difficulties within its core business. Additionally, gross margins decreased by approximately 165 basis points year-over-year due to rising tariff costs, which have imposed substantial pressures on the cost of goods.
Looking ahead, e.l.f. Beauty’s guidance for full-year net sales growth remains optimistic at 18% to 20%. The adjusted EBITDA is projected to be between $302 million and $306 million for fiscal 2026, indicating confidence in continued operational effectiveness, despite facing tariff impacts estimated at $17 million for every 10 percentage point increase.
The company also expressed its commitment to its value-driven pricing strategy, with 75% of its product portfolio priced at $10 or less. This approach aims to resonate with value-conscious consumers, even as they navigate recent price adjustments.
During the earnings call, CFO Mandy Fields addressed concerns regarding shipment delays related to pricing strategies, suggesting that while these disruptions negatively impacted Q2 results, recovery in shipments is anticipated in subsequent quarters. The company expects to see an underlying growth of 2% to 5% for the second half of the year, bolstered by strong consumption trends.
e.l.f. Beauty’s recent achievements, combined with its proactive steps to tackle challenges, position it well within a competitive market landscape, offering a hopeful outlook for the upcoming quarters.