At a glance (Nov. 5, 2025)
- Q2 FY26 net sales: $343.9M, +14% YoY; gross margin: 69% (−165 bps); adj. EPS: $0.68.
- Guidance: FY26 net sales $1.55B–$1.57B; adj. EPS $2.80–$2.85 (below consensus).
- After-hours move: shares down ~19% on the outlook and tariff commentary; ~75% of products sourced from China; tariff hit seen >$50M annually.
What happened today
e.l.f. Beauty reported second‑quarter fiscal 2026 (quarter ended Sept. 30, 2025) results showing net sales of $343.9 million (+14% YoY), gross margin of 69% (down 165 bps primarily on higher tariff costs), and adjusted EPS of $0.68. Management highlighted this as the 27th consecutive quarter of net‑sales growth and cited a record launch of Rhode in Sephora North America.
Why the stock sank after the bell
After the release, shares fell about 19% in extended trading as the company’s FY26 outlook—net sales $1.55–$1.57 billion; adjusted EPS $2.80–$2.85—landed below Wall Street estimates (roughly $1.65B and $3.58, respectively). Management commentary also underscored tariff headwinds, with ~75% of products made in China and tariff costs projected at >$50 million annually.
How results compared with expectations
Top line missed the Street’s Q2 revenue view (about $366.4M), but adjusted EPS beat (reported $0.68 vs. $0.57 expected). On a GAAP basis, net income was $3.0M (EPS $0.05) for the quarter.
The details investors care about
- Margins & spending: The 165 bps gross‑margin compression to 69% was “primarily driven by higher tariff costs” (pricing/mix was a partial offset). Adjusted EBITDA was $66.2M (19% of sales). Business Wire
- Adjusted profitability:Adjusted net income $40.7M; adjusted EPS $0.68 for Q2.
- Balance sheet (9/30):Cash $194.4M; long‑term debt $831.6M.
- Rhode update: Management called out a record‑breaking Sephora North America launch for Rhode, which is now part of the portfolio alongside e.l.f. Cosmetics, e.l.f. SKIN, Keys Soulcare, Well People, and Naturium.
Guidance snapshot (FY26)
- Net sales:$1.55B–$1.57B (+18%–20% vs. FY25).
- Adjusted EPS:$2.80–$2.85.
- Adjusted EBITDA:$302M–$306M; adj. effective tax rate:23%; FY diluted shares:~59M.
These figures set the bar beneath consensus and, paired with tariff commentary, drove the after‑hours selloff.
Key timing
Management scheduled a webcast at 4:30 p.m. ET today (Nov. 5) to discuss results and outlook; an archived replay will be posted on the investor site.
Quick take
e.l.f. continues to grow revenue and win shelf space, but tariff‑driven cost pressure and a more cautious FY26 profit outlook overshadowed the quarter. The revenue miss and lower guide—even as adjusted EPS beat in Q2—signal a year where marketing and integration investments (and tariffs) could keep a lid on margin expansion. Traders focused on those forward‑looking pressures, not the streak of top‑line growth.
News roundup — Nov. 5, 2025
- Reuters: Elf Beauty shares slump after annual sales forecast comes below estimates — details on the ~19% after‑hours drop, tariff exposure (~75% China) and >$50M tariff cost; consensus comparisons.
- Business Wire (company release): e.l.f. Beauty Announces Second Quarter Fiscal 2026 Results — full Q2 line items, margin commentary, and FY26 guidance.
- Associated Press: Fiscal Q2 earnings snapshot — confirms GAAP EPS $0.05 and FY26 ranges.
Bottom line
For today (Nov. 5, 2025), the story on ELF stock is straightforward: solid Q2 growth, but a softer‑than‑hoped FY26 profit outlook plus tariff overhang sent the stock sharply lower after hours. Keep an eye on any updated color from the evening call regarding price actions, tariff mitigation, and Rhode’s rollout, as these will be key to the holiday‑quarter setup.
This article is for information only and is not investment advice.
