Good morning. Amid persistent economic headwinds and shifting trade policy, e.l.f. Beauty is finding opportunity in constraint. The company’s focus on affordability continues to win over consumers, even as shoppers grow more selective, according to CFO Mandy Fields.
“We’re still a value to our consumers when people are pulling back and being more choiceful with their spending,” Fields told me. Even after a recent $1 price increase, 75% of e.l.f. Beauty’s products remain priced at $10 or less, she said.
“If a shopper only has $20 to spend, e.l.f. is a great option,” Fields said. “You can still come in, buy a couple of products, and still have money left in your pocketbook. That’s exactly where we want to be for our consumers.”
Last week, e.l.f. Beauty reported results for the three and six months ended September 30. Quarterly net sales rose 14% to $343.9 million from $301.1 million a year earlier—slightly below analyst expectations.
After choosing not to issue full-year guidance last quarter, the company now forecasts fiscal 2026 revenue between $1.55 billion and $1.57 billion, representing 18%–20% growth. Analysts had expected closer to $1.65 billion. Even so, adjusted earnings of $0.68 per share topped consensus estimates of $0.57.
One of the biggest challenges ahead: tariffs. The company expects more than $50 million in additional annual costs tied to higher U.S. tariffs in fiscal 2026. According to Fields, e.l.f. Beauty’s weighted average tariff rate has surged to about 60% this year, up from 25% last year. Roughly 75% of e.l.f.’s production is based in China.
To mitigate the impact, Fields said the company is using a mix of price adjustments, supply chain diversification, and international expansion. The recent $1 price increase was one lever, and the company is also aggressively sourcing outside of China and growing sales in markets where tariffs don’t apply, she explained.
For Fields, leading through volatility comes down to agility. “We choose words of the year here at e.l.f., and the word of the year was flourish,” Fields said. “Just going through this period of time where we’ve had to do so many scenarios, and you get so many things thrown at you, how do you continue to focus on flourishing as a company?”
What she’s learned this year is that no matter what is going on around you—“Continue to keep your eye on growth.” Staying close to digital innovation and working to integrate AI across the enterprise is also top of mind.
Despite tariffs, inflation, and evolving consumer behavior, Fields remains focused on the fundamentals. “We still have a lot of growth ahead of us,” she said. “We still have aspirations to be the No. 1 color cosmetics brand.
A quick note: The U.S. observes Veterans Day today, and I’d like to thank all who have served, including members of my own family.
