Rhode’s record-breaking Sephora debut fuels optimism despite tariff headwinds
E.l.f. Beauty has released its long-awaited forecast for fiscal 2026, projecting net sales between $1.55 billion and $1.57 billion—an increase from $1.31 billion in fiscal 2025. The guidance arrives after a quarter-long delay as the company evaluated the financial impact of heightened tariffs, now averaging 56%, more than double last year’s rate.
Despite the trade pressures, the company remains upbeat, particularly after integrating Hailey Bieber’s Rhode into its brand portfolio. The $1 billion acquisition proved its value quickly: Rhode’s Sephora North America launch this quarter was the largest in the retailer’s history—reportedly two-and-a-half times larger than the next-biggest brand debut.
Chairman and CEO Tarang Amin confirmed that this was the first full quarter with Rhode under E.l.f. ownership, noting its immediate impact. Alongside E.l.f. and Naturium, Rhode is expected to be a cornerstone of the company’s continued expansion strategy.
For the second quarter ending Sept. 30, E.l.f. reported a 14% year-over-year increase in net sales to $343.9 million—short of Wall Street’s $366 million target. Adjusted net income fell slightly to $40.7 million from $44.9 million the year prior, while earnings per share came in at 68 cents, beating analyst expectations of 57 cents.
The full-year adjusted net income is expected to fall between $165 million and $168 million, down from $198 million in 2025. While margins remain under pressure, E.l.f. gained 140 basis points of market share in the quarter, reinforcing confidence in its long-term strategy.
Looking ahead, Amin indicated that the company’s M&A approach remains disciplined. “We have a very high bar,” he said, referencing past acquisitions like Rhode and Naturium as benchmarks. With a strong balance sheet even post-acquisition, E.l.f. is positioned to pursue select opportunities, but its primary focus will remain on organic growth.
The forecast affirms E.l.f. Beauty’s role as a growth leader in the value-driven, digitally fluent beauty segment—one that’s showing resilience and reach, even in a volatile trade climate.