e.l.f. Beauty Q3 Sales Jump 38% to $489.5M, Raises FY26 Outlook as Target Cut to $100
For Q3 ended Dec 31, 2025, e.l.f. Beauty net sales rose 38% to $489.5M, while gross margin dipped 30bps to 71% due to higher tariffs. The company raised FY26 net sales growth outlook to 22-23% on Rhode's $260-265M contribution, though TD Cowen lowered its price target to $100 from $110.
1. Q3 Results
e.l.f. Beauty reported quarterly net sales of $489.5 million for the period ended December 31, 2025, marking a 38% increase year-over-year driven by strong performance in US retailer and e-commerce channels as well as international expansion.
2. Margin Pressure
The company’s gross margin fell 30 basis points to 71% as elevated tariff costs weighed on profitability, though management noted that pricing actions and favorable product mix partially offset these headwinds.
3. FY26 Outlook Lift
e.l.f. Beauty raised its full-year 2026 net sales growth guidance to 22%–23%, up from 18%–20%, expecting the Rhode brand to contribute approximately $260–265 million, versus prior estimates of $200 million.
4. Price Target Revision
TD Cowen reduced its price target on e.l.f. Beauty shares to $100 from $110, citing updated forecasts and revised valuation assumptions in light of the company's latest guidance and margin outlook.