E.l.f. Beauty Sales Jump 51% to $520.8 Million in Q2

E.l.f. Beauty posted second-quarter net sales of $520.8 million, up 51% year over year, according to a Wednesday press release. Net income jumped to roughly $30 million, up from just under $3 million in the same period last year. That is a tenfold profit increase in twelve months.

CEO Tarang Amin told analysts on a call Wednesday that the growth stems more from the company's innovation pipeline than from its price positioning. A broad price-reduction test run in May showed 90% of SKUs were already appropriately priced. Only 10% of items saw outsized unit growth when prices dropped by $1.

The company raised its fiscal year 2027 outlook. It now expects net sales growth of 22% to 24%, up from its previously predicted range of 18% to 20%.

Do analysts believe the numbers?

William Blair analysts made a point of confirming that the staggering growth figures are not fabricated, calling the 51% gain almost hard to believe. They doubled down on their investment thesis in an emailed note Wednesday.

"We believe in our thesis that e.l.f. Beauty's distinctive value proposition and go-to-market capabilities will enable it to further its pursuit of becoming a global leader in beauty," the William Blair analysts said.

Rhode, part of a portfolio that also includes the namesake E.l.f. brand and Naturium, remained a core driver of the company's strength, according to some analysts. Visibility into the core E.l.f. brand itself remains more limited.

"We believe Rhode momentum will likely extend into next year even against tougher comparisons, but the core e.l.f. brand performance remains difficult to assess," TD Cowen analysts said in a Thursday note. "The Beauty category remains more resilient in the current environment."

What role do retail partners play?

Company executives on the call highlighted relationships with key U.S. mass retailers including Sephora, Target and Walmart. Amin singled out the exclusivity deal for the newer E.l.f. Hair care collection through Target, which has delivered early returns.

"We have seen great success initially in the first three months at our exclusive launch with Target," Amin told analysts. "E.l.f. Hair is already in the top 20 brands in hair care, top 7 in styling. And in terms of our expansion plans, we're currently in exclusivity with Target. We will eventually expand distribution of e.l.f. Hair similar to what we've done with e.l.f. Skin, and that will come with incremental space."

Reaching the top 20 in hair care within three months of launch gives the company a template it has already run once with e.l.f. Skin. Breaking the Target exclusivity will add shelf space and a new sales channel when it happens.

The raised guidance, a two-percentage-point bump at the midpoint, signals management expects the momentum to hold through fiscal 2027.