Core Insights - e.l.f. Beauty Inc. is leveraging pricing discipline to manage tariff pressures through fiscal 2026, achieving a 14% year-over-year net sales growth in Q2 of fiscal 2026 despite significant tariff challenges [1][9] Pricing Strategy - A $1 price increase across the portfolio was implemented on August 1, 2025, to mitigate the impact of higher tariffs from China-based production, with 75% of products still priced at $10 or below and an average retail price of $7.50 [2] - The core e.l.f. brand experienced a 7% growth in Q2, indicating strong consumer demand and limited price elasticity following the price increase [2] Profitability and Margins - Tariffs negatively impacted the gross margin, which declined by approximately 165 basis points year-over-year, but pricing and product mix helped stabilize margins against an estimated 3,500-basis-point tariff headwind for the year [3] - Management estimates that a 10 percentage-point increase in tariffs results in $17 million in annualized cost pressure, highlighting the importance of proactive pricing adjustments [3] Product Mix and Growth Outlook - The introduction of the Rhode brand supports margin defense through product mix enhancement, contributing positively to gross margin recovery despite near-term profitability compression due to tariffs [4] - e.l.f. Beauty anticipates sequential gross margin improvement in the second half of fiscal 2026, driven by pricing strategies, product mix benefits, and moderating tariff rates, with full-year net sales growth projected at 18-20% and organic growth at 3-4% [5] Market Performance and Valuation - e.l.f. Beauty's shares have declined by 35.1% over the past six months, contrasting with the industry's growth of 16.5%, while competitors Nu Skin and Coty have seen share price movements of 30.1% increase and 33.4% decrease, respectively [6] - The forward 12-month price-to-earnings ratio for e.l.f. Beauty is 23.55, lower than the industry average of 29.35, indicating a premium valuation compared to Nu Skin and Coty [7] Earnings Estimates - The Zacks Consensus Estimate for e.l.f. Beauty's fiscal 2026 earnings suggests a year-over-year decline of 15.9%, while fiscal 2027 indicates a growth of 24.7%, with recent downward revisions of 8 cents and 18 cents per share for fiscal 2026 and 2027, respectively [10]

Core Viewpoint - Piper Sandler has lowered its price target for e.l.f. Beauty, Inc. to $85.00 from $100.00 while maintaining a Neutral rating, resulting in a more than 2% decline in shares on Monday [1] Group 1: Market Competition - Intensifying competition is noted as rivals regain momentum, impacting e.l.f.'s market share gains which slowed in the second quarter of fiscal 2026 but showed improvement in the third quarter due to product launches [2] - Competitors such as L'Oréal, NYX, and Maybelline are increasing their innovation efforts, raising the bar for differentiation in the market [2] Group 2: Sales Growth Estimates - The third-quarter fiscal 2026 estimate for core e.l.f. sales growth has been raised to 5%, exceeding the company's annual guidance of 3%–4% [3] - However, the fourth-quarter forecast has been lowered to a 1% decline due to challenging comparisons [3] Group 3: Valuation Metrics - The reduced price target reflects a valuation of 16x fiscal 2027 EBITDA, down from 18x previously [4] - The stock's current P/E multiple of 26x is near the midpoint of its recent 18x–35x range and may face compression if shipments continue to lag behind consumption trends into fiscal 2027 [4]

My top 10 things to watch Monday, Dec. 22 1. Stocks were headed for a higher open to kick off the holiday-shortened trading week . This follows a volatile week , during which the S & P 500 logged its third winning week in the past four. Still, there's doubt about whether a "Santa Claus Rally" will actually happen. The New York Stock Exchange will close early on Wednesday for Christmas Eve, and will be closed entirely on Thursday for Christmas Day. 2. Gold soared to another record high earlier this morning. ...

Core Insights - e.l.f. Cosmetics has extended its partnership with The Wonder Women of Wrestling Foundation for a second consecutive year, becoming the first beauty sponsor of the WWOWF Varsity Girls Wrestling Tournament scheduled for December 29-30, 2025, in Columbia, Missouri [1][2] Company Commitment - The partnership emphasizes e.l.f.'s dedication to promoting equality for women and girls in sports, particularly in areas that have historically lacked visibility, funding, and access [2][6] Industry Growth - Girls wrestling is identified as the fastest-growing high school sport in America, with participation increasing to over 74,000 athletes in the 2024-2025 school year, marking a 15% rise from the previous year, and nearly 1,000 additional schools adding girls wrestling programs [3][4] Event Significance - The seventh annual tournament in Columbia is one of the largest high school girls wrestling competitions in the U.S., showing significant year-over-year growth in attendance and awareness, indicating a cultural shift in the perception of girls wrestling [4][9] Scholarship Support - As part of the sponsorship, e.l.f. Cosmetics will support eight college-bound senior wrestlers through scholarships awarded via the WWOWF's annual essay competition, aimed at reducing financial barriers to higher education [5][6] Broader Initiatives - e.l.f. Cosmetics' partnership with WWOWF is part of a larger strategy to invest in women's sports, which includes long-term commitments to various sports leagues and initiatives, focusing on expanding access, increasing visibility, and funding scholarships [6][7]

Group 1 - e.l.f. Beauty, Inc. is currently experiencing temporary shipment timing challenges that are affecting its sales [1] - Despite these challenges, the company is expected to see an acceleration in revenue growth beyond the current fiscal year [1] Group 2 - The analyst has over 15 years of experience in investment and research services, focusing on mid-sized hedge funds [1] - The investment strategy includes medium-term investing in growth stories available at reasonable prices and short selling when downside catalysts are identified [1] - The analyst has a background in analyzing industrial, consumer, and technology sectors, which informs their investment convictions [1]

Group 1 - e.l.f. Beauty, Inc. is currently experiencing temporary shipment timing challenges that are affecting its sales [1] - Despite these challenges, the company is expected to see an acceleration in revenue growth beyond the current fiscal year [1] Group 2 - The analyst has over 15 years of experience in investment and research services, focusing on mid-sized hedge funds [1] - The investment strategy includes medium-term investing in growth stories available at reasonable prices and short selling when downside catalysts are identified [1] - The analyst has a background primarily in industrial, consumer, and technology sectors, where higher conviction in investments is typically found [1]

Core Viewpoint - e.l.f. Beauty has launched a new makeup game called Glow Up! on Roblox, aiming to enhance self-expression among gamers [1] Group 1: Product Launch - The Glow Up! game is described as a next-generation makeup game and immersive beauty experience [1] - The game is specifically designed for players aged 13 and above [1] Group 2: Market Insight - 60% of gamers believe that self-expression through gameplay is increasingly important [1] - e.l.f. Beauty is positioning itself to redefine authenticity for Roblox players [1]

Key Takeaways ELF gained 140 basis points of market share as brand demand stayed strong in Q2 FY26.ELF invests 24%-26% of sales in marketing, lifting brand awareness across the United States and abroad.ELF expects 18%-20% net sales growth in FY26, supported by innovation and value pricing.Brand-led innovation is emerging as a critical driver of e.l.f. Beauty Inc.’s (ELF) growth momentum in fiscal 2026, enabling the company to outperform a slow-growing mass beauty category. In the second quarter of fiscal 20 ...

Company Performance - e.l.f. Beauty's stock closed at $76.36, reflecting a -2.09% change from the previous day, which was less than the S&P 500's daily loss of 1.07% [1] - Over the past month, e.l.f. Beauty shares have gained 4.84%, while the Consumer Staples sector has lost 0.24% [1] Upcoming Earnings - The company is expected to report an EPS of $0.68, down 8.11% from the prior-year quarter, with a revenue estimate of $452.79 million, indicating a 27.43% increase compared to the same quarter of the previous year [2] - For the annual period, the anticipated earnings are $2.93 per share and revenue of $1.57 billion, reflecting shifts of -13.57% and +19.37% respectively from the last year [3] Analyst Revisions and Rankings - Recent revisions to analyst forecasts for e.l.f. Beauty are crucial as they often indicate shifting business dynamics, with positive revisions reflecting analyst optimism [3] - e.l.f. Beauty currently holds a Zacks Rank of 5 (Strong Sell), with the Zacks Consensus EPS estimate remaining stagnant over the past month [5] Valuation Metrics - The company has a Forward P/E ratio of 26.58, which is a premium compared to the industry average Forward P/E of 8.06 [6] - e.l.f. Beauty's PEG ratio stands at 4.19, while the average PEG ratio for cosmetics stocks is 0.86 [6] Industry Context - The Cosmetics industry is part of the Consumer Staples sector and currently holds a Zacks Industry Rank of 206, placing it in the bottom 17% of all industries [7] - Research indicates that the top 50% rated industries outperform the bottom half by a factor of 2 to 1 [7]

Core Insights - e.l.f. Beauty, Inc. (ELF) has experienced a significant decline in share price, dropping 37.9% year-to-date due to investor concerns over slowing organic growth, margin pressures, and a challenging outlook [1][7]. Performance Comparison - e.l.f. Beauty has underperformed compared to the industry growth of 10.3%, the Zacks Consumer Staples sector's decline of 0.9%, and the S&P 500's gain of 19.5% [2]. - Major competitors like The Estee Lauder Companies Inc. and Nu Skin Enterprises, Inc. have seen substantial gains of 40.8% and 52.1% respectively, while Interparfums, Inc. has dropped 37% [2]. Business Challenges - The core business of e.l.f. Beauty has softened, with organic sales turning negative in Q2 of fiscal 2026 due to shipment disruptions and delayed price increases by retailers [3]. - International growth has also slowed, particularly in key European markets, due to tough comparisons [3]. Cost Pressures - Approximately 75% of e.l.f.'s production is based in China, making the company vulnerable to increased tariff rates, which have led to a significant contraction in gross margin [4]. - Despite price adjustments, the company has struggled to fully offset the cost burden from tariffs, which are expected to persist into fiscal 2026 [4]. Operating Expenses - Operating expenses are high, with increased marketing spending and elevated SG&A costs due to team expansion and infrastructure investments, contributing to a decline in adjusted EBITDA [5]. Financial Outlook - Analysts have significantly lowered their EPS estimates for fiscal 2026 and 2027 due to slowing organic growth, higher tariff costs, and ongoing SG&A pressures [9]. - The current Zacks Consensus Estimate for fiscal 2026 EPS is 2.93, down from previous estimates of 3.53 [10]. Valuation - e.l.f. Beauty's forward 12-month P/E ratio is 22.32X, below the industry average of 29.23X, but ongoing margin pressures limit the attractiveness of this valuation [10]. - The company has a Value Score of F, indicating weak value traits compared to peers [10]. Strengths - Despite the challenges, e.l.f. Beauty maintains strong brand momentum and market-leading consumption growth, with the Rhode acquisition contributing positively to growth [11]. - The brand's successful debut at Sephora and rapid e-commerce expansion have enhanced the company's portfolio [11].