e.l.f. Beauty (ELF) investor relations material

Executive summary

• Achieved 14% year-over-year net sales growth in Q2 to $344 million, marking the 27th consecutive quarter of net sales and market share gains, with strong performance in both US retailer and e-commerce channels.

• Outpaced category trends by over three times, with strong performance in both mass cosmetics and skin care.

• The acquisition of Rhode contributed $52 million to Q2 net sales and is expected to add $200 million for the year post-acquisition, with a record-breaking launch in Sephora North America.

• Organic net sales (excluding Rhode) declined 3% in Q2 due to a temporary halt in shipments related to a price increase, but consumption outpaced the category by over three times.

• Naturium saw momentum with new awareness campaigns and international expansion.

Financial highlights

• Q2 adjusted EBITDA was $66 million (19% of net sales), down 4% year-over-year; adjusted net income was $41 million (68 cents per diluted share), compared to $45 million (77 cents) a year ago.

• Q2 gross margin was 69%, down 165 basis points year-over-year, mainly due to higher tariffs.

• Q2 SG&A expenses increased to $231.1 million (67% of net sales); adjusted SG&A was $193.2 million (56% of net sales).

• Marketing and digital investment was 23% of net sales in Q2.

• US net sales grew 18% year-over-year; international net sales grew 2%.

Outlook and guidance

• Fiscal 2026 net sales growth expected at 18%-20% to $1,550–$1,570 million, with organic net sales (ex-Rhode) up 3%-4%.

• Adjusted EBITDA guidance: $302-$306 million; adjusted net income: $165-$168 million; adjusted EPS: $2.80-$2.85.

• Second-half net sales growth expected at 24%-27% year-over-year, with Rhode contributing 22 percentage points.

• Marketing spend to increase to 27%-29% of net sales in the second half.

• Gross margin in the second half expected to be 71%, up 200 basis points sequentially.