e.l.f. Beauty's quarterly net sales reached $520.8 million for the three months ended September 30, up 51%. The figure far exceeds the $474 million anticipated by Wall Street analysts, according to WWD.
Adjusted net income came in at $72.7 million, compared with $40.7 million a year earlier, for adjusted diluted earnings per share of $1.21. Tarang Amin, chairman and chief executive officer of e.l.f. Beauty, attributed the performance to the entire portfolio: « What I'm most pleased about is we had strength across our entire portfolio. Every one of our brands contributed very strong growth this quarter », he said, quoted by WWD.
The Rhode engine in Europe
The Rhode brand was launched at Sephora in 19 European countries during the quarter. According to Tarang Amin, « Building on that success, this quarter we broke our own records with the expansion into Europe across 19 countries, exceeding what we achieved in North America and marking Sephora's largest launch ever. » According to the executive, this was said to be the first time that Sephora Europe surpassed Sephora North America on a launch, a sign of the brand's momentum.
Rhode is nevertheless present in only 40% of Sephora stores worldwide, leaving, according to Amin, room for further growth: « We still have a lot further to go, and there is not a market in the world that does not want Rhode right now. » The Rhode x Alexandra Leclerc collaboration had generated a waiting list of 200,000 people, and most products sold out within an hour.
Diversification and international openness
According to Tarang Amin, e.l.f. also launched the brand at Sephora Brésil, where it claims the top spot by value and volume, consolidating its number one position at Sephora Mexique; Naturium is also continuing its expansion at Sephora. In the United States, e.l.f.'s net sales rose 25% for the quarter, while international sales jumped 165%. International sales, however, account for only about 25% of the group's net sales on a trailing twelve-month basis, compared with about 70% for its traditional peers, a gap that Tarang Amin presents as a growth opportunity: « We've often talked about the white space we have internationally. Only 25 percent of our business is outside the U.S. versus 70 percent for our peers and we know there's pent-up demand for our brands. »
The group also expanded its offering with e.l.f. Hair, a range of six products sold for under $10 at Target, of which about half of buyers are said to be new to the brand. e.l.f. also gained 30 basis points of market share during the quarter.
Given this momentum, e.l.f. Beauty raised its annual sales growth guidance to a range of 22% to 24%, up from 18% to 20% previously, and raised its net sales guidance for fiscal year 2027 to between $2 billion and $2.02 billion. Asked about potential acquisitions, Tarang Amin said the group had a strong balance sheet and would remain attentive to any brand of the caliber of Rhode or Naturium: « We have a very strong balance sheet. If we saw another Rhode or Naturium, we would acquire it. [...] So the bar is extremely high from an M&A standpoint, but we are open to it. »
