e.l.f. Beauty Inc (NYSE:ELF) delivered a quarterly earnings report that handily surpassed analyst expectations, prompting a significant positive reaction in after-hours trading. The company’s third-quarter fiscal 2026 results, released on February 4, 2026, showcased accelerating growth and led management to raise its full-year outlook, underscoring continued momentum in its business.
Quarterly Performance vs. Estimates
The cosmetics and skincare company reported robust top-line growth and substantial bottom-line outperformance for the quarter ended December 31, 2025.
- Revenue: Net sales reached $489.5 million, a 38% increase compared to the same quarter last year. This figure notably exceeded the analyst consensus estimate of approximately $463.7 million.
- Earnings Per Share (Non-GAAP): Adjusted diluted earnings per share came in at $1.24. This result was a staggering 71% above the analyst estimate of $0.73 per share, highlighting significant operational leverage and profitability.
The strength was broad-based, driven by growth across both retailer and e-commerce channels in the U.S. and international markets. CEO Tarang Amin pointed to market share gains for the core e.l.f. Cosmetics brand and a successful U.K. launch of the rhode brand in Sephora as key contributors.
Market Reaction and Revised Outlook
The market responded enthusiastically to the earnings beat and the company's increased confidence. Following the announcement, ELF stock rallied approximately 15% in after-hours trading. This sharp move suggests investors were positively surprised by the magnitude of the earnings beat and the upgraded guidance.
Central to the bullish sentiment was management's decision to raise its fiscal 2026 outlook. The updated forecast now calls for:
- Net sales between $1.600 billion and $1.612 billion, up from a prior range of $1.550-$1.570 billion. The new midpoint represents expected year-over-year growth of 22-23%.
- Adjusted EPS in a range of $3.05 to $3.10, increased from a previous forecast of $2.80-$2.85.
This revised guidance is crucial because it surpasses existing analyst expectations. The new adjusted EPS midpoint of $3.08 is above the pre-report analyst consensus estimate of $2.87 for the full year. By raising its own targets so significantly, the company has effectively reset market expectations higher.
Key Financial and Strategic Highlights
Beyond the headline sales and profit figures, several other elements from the press release paint a picture of a company in aggressive growth mode, albeit with associated costs.
- Profitability Metrics: Gross margin saw a slight contraction of 30 basis points to 71%, attributed primarily to higher tariff costs. However, adjusted EBITDA margin remained strong at 25% of net sales for the quarter, with adjusted EBITDA itself growing 79% year-over-year to $123.0 million.
- Increased Investment: Selling, general, and administrative (SG&A) expenses rose significantly, driven by increased spending on marketing, distribution, and compensation. This reflects the company's strategy to invest heavily behind its brand portfolio and growth initiatives.
- Balance Sheet Changes: The company's balance sheet shows the impact of its acquisition of rhode, completed earlier in the fiscal year. Compared to the end of fiscal 2025 (March 31, 2025), goodwill and intangible assets have increased substantially. Long-term debt also rose to $816.7 million as of December 31, 2025, up from $256.7 million at the end of the last fiscal year, largely financing the acquisition. The company ended the quarter with a healthy $196.8 million in cash and cash equivalents.
Looking Ahead
The raised guidance sets a high bar for the final quarter of fiscal 2026. Analysts will now be looking for the company to execute against its new targets. The current analyst consensus for the upcoming Q4 revenue is approximately $418.4 million, a figure that may see revisions following this report and the company's updated full-year sales forecast.
For a detailed view of historical earnings, future estimates, and analyst revisions, readers can review the earnings and estimates data for ELF.
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