Oakland-based cosmetics company e.l.f. Beauty reported a 51% year-over-year net sales increase to $520.8 million on Wednesday, November 4, 2026, marking its 31st consecutive quarter of revenue growth. According to e.l.f. Beauty, the financial surge for the three months ended September 30, 2026, was driven by performance across its brand portfolio in both brick-and-mortar retail and e-commerce channels, with a major boost from the September European retail rollout of Hailey Bieber’s skincare and makeup label, Rhode.
The company’s latest earnings beat Wall Street expectations and prompted executives to raise their full-year fiscal 2027 outlook. While management pointed to gains across its entire roster—including e.l.f. Cosmetics, e.l.f. SKIN, Naturium, Well People, and new hair-care and fragrance lines—Rhode’s expansion into 19 European markets via beauty retailer Sephora served as a primary catalyst for the quarter's international numbers.
Rhode’s European Sephora Rollout and International Momentum
Acquired by e.l.f. Beauty last year, Rhode has rapidly transitioned from a viral direct-to-consumer line known for peptide-infused lip treatments and barrier-supportive skincare formulations into a global retail powerhouse.
During the quarter ended September 30, international net sales for e.l.f. Beauty climbed 165%, while U.S. net sales rose 25%, according to Glossy, which cited Chief Financial Officer Mandy Fields.
While the company's official earnings release attributes the 51% net sales growth broadly to retail and e-commerce strength across the U.S. and international markets, Glossy reports that Sephora’s initial wholesale order ahead of Rhode’s September launch across 19 European markets generated substantial pipeline shipments that drove the quarterly spike. Fields noted during the earnings call that the European rollout marked a record regional debut for the retailer, second only to Rhode's North American retail launch last year.
Despite the scale of the European debut, executives see significant room for further retail distribution. Chairman and CEO Tarang Amin noted that international sales accounted for roughly 25% of the company's net sales on a trailing 12-month basis, compared to approximately 70% for legacy beauty competitors.
Amin pointed out that about 65% of e.l.f. Cosmetics' social media audience and 75% of Rhode’s online following reside outside the United States, yet Rhode is currently stocked in only 40% of Sephora’s global storefronts.
Direct-to-Consumer Exclusives and Portfolio Performance
Alongside its brick-and-mortar expansion with Sephora, Rhode has maintained high velocity on its own digital storefront through limited-edition seasonal color drops and influencer partnerships. Amin told investors that a recent direct-to-consumer collaboration with content creator Alexandra Leclerc—featuring exclusive product shades—generated a 200,000-person digital waitlist, with most items selling out in under an hour upon release.
Across the broader corporate portfolio, digital engagement and accessible pricing continued to fuel unit volume. According to CNBC, Amin stated that e.l.f. ranks as the most-searched brand on TikTok Shop and the second-largest cosmetics brand on the platform.
This momentum helped accelerate total company growth to 51%, up from the 35% and 36% quarterly sales increases reported in May and August, respectively.
Gross margin also expanded by 1.6% during the quarter, aided in part by a 0.3% benefit from tariff refunds. Having received the bulk of those refunds in the first fiscal quarter, the company expects to collect roughly $55 million in tariff relief for the year. Rather than pocketing the windfall, management reinvested the funds into marketing and consumer pricing, lowering the retail price of approximately 10% of its product units by $1 to stimulate consumer demand ahead of the holiday shopping season.
Financial Breakdown and Raised Fiscal 2027 Guidance
For the period ended September 30, 2026, e.l.f. Beauty posted GAAP net income of $30.03 million, or $0.50 per diluted share, a sharp rise from roughly $3 million, or $0.05 per share, in the prior-year period. On a non-GAAP basis, adjusted diluted earnings per share reached $1.21.
The quarter's accounting also included a $17.7 million fair-value adjustment tied to contingent consideration from the Rhode acquisition, reflecting the skincare brand's revenue outperformance relative to its initial earnout thresholds.
Following the strong quarterly showing, management raised its full-year financial forecast. In its official press release, e.l.f. Beauty projected fiscal 2027 net sales between $2.003 billion and $2.029 billion, representing a 22% to 24% year-over-year increase and improving upon its prior forecast of 18% to 20% growth ($1.94 billion to $1.97 billion). By contrast, WWD reported the updated forecast range as $2.00 billion to $2.02 billion.
Additionally, CNBC reported that the company lifted its full-year adjusted EBITDA guidance to between $421 million and $427 million, up from a prior range of $401 million to $407 million. Full-year adjusted earnings per share are now projected between $3.82 and $3.86, up from $3.50 to $3.55, while expected full-year net income was raised to a range of $231 million to $233 million.
As of September 30, 2026, the company held $350.8 million in cash and cash equivalents against $826.7 million in total debt.
What This Means for Beauty Consumers and Investors
For beauty shoppers, e.l.f. Beauty’s financial strategy highlights a dual-track approach to the current cosmetic market: pairing mass-market price reductions on everyday makeup staples with prestige-adjacent, high-demand skincare launches at Sephora. The $1 price cuts on 10% of e.l.f. units offer rare inflation relief in the drugstore beauty aisle, while Rhode’s continued expansion into global Sephora doors makes Bieber's sought-after formulations easier to purchase in person without relying solely on restock alerts.
How much of the 165% international growth came from wholesale stocking versus consumer purchases?
The company's public disclosures do not break out exact retail sell-through figures versus initial wholesale pipeline shipments, nor do they isolate Rhode’s exact revenue share from other international brand sales.
While Sephora’s initial inventory order for 19 European markets heavily boosted the quarter's shipping numbers, management stated they are seeing encouraging ongoing sales trends in stores and online.
Why do some reports refer to this period as the third quarter?
While official company filings and CNBC identify the three months ended September 30, 2026, as fiscal Q2 2027, some media coverage—including WWD—referred to the period as the third quarter. This discrepancy stems from comparing the standard calendar third quarter (July through September) with e.l.f. Beauty's fiscal calendar, in which the period represents the second quarter of fiscal year 2027.