Elf Beauty sales rose by 14% year-over-year in its second fiscal quarter of 2026, greatly driven by its acquisition of Rhode Beauty.
However, shares in the company tanked 20.5% in after-hours deals after revenue guidance came in far weaker than expected.
This is the first earnings release the company has announced since acquiring Rhode Beauty last quarter.
“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,” Elf Chairman and CEO, Tarang Amin said.
For the second quarter, net sales reached US$343.9 million. Despite this being an increase year-over-year, this missed Wall Street guidance of US$366 million.
Revenues for the company were driven by U.S. sales, which surged by 18% while international sales were also up by 2%.
The company saw earnings of 68 cents per share, up from 33 cents per share a year earlier and surpassing expectations of 57 cents per share.
During the earnings call, CFO Mandy Fields also pointed to Rhode as a standout for the business.
“The launch was [by far] the second best launch that they’ve had in North America, which is incredible to see,” Fields said.
“Rhode continues to have momentum behind it.”
Elf expects that Rhode will deliver US$200 million to the company’s net sales this year, post-acquisition.
“On an annualised basis, $300 million is what we expect Rhode to be for this fiscal year, and that would be 40% year-on-year growth,” Fields said.
“So really just a tremendous performance out of Rhode.”
Rhode is set to launch in Sephora in the UK on 10 November.
While the company was able to deliver positive results this quarter, it has seen profitability slump due to Donald Trump’s tariffs, as it primarily sources its makeup from China.
This caused net income to decline by 84% to US$3 million.
Amin said the second quarter is expected to see the biggest impact from tariffs.
“In response to tariffs, we took our prices up $1, that was effective 1 August, so you’re seeing tariff impact without pricing in this quarter,” Amin said.
“In the second half of the year, gross margin will actually improve sequentially.
Elf Beauty (NYSE: ELF) shares fell by 0.39% on Wednesday to US$117.83, and shed a further 21.3% to $92.75 in extended trading. Its market cap is US$6.69 billion.
