Core Insights - e.l.f. Beauty, Inc. (ELF) experienced solid top-line growth in Q2 of fiscal 2026, with net sales increasing by 14% due to market share gains, despite profitability pressures from tariffs [1][3][4] - Gross margin contracted by approximately 165 basis points to 69%, primarily due to higher tariff expenses, although pricing and product mix provided some compensation [1][9] - Operating income decreased significantly to about $7.7 million from $27.9 million year-over-year, indicating a substantial contraction in operating margin [2][9] Financial Performance - Adjusted EBITDA for e.l.f. Beauty totaled roughly $66 million, representing 19% of sales, down from the previous year's level, highlighting the impact of tariffs and increased expenses on profitability [2][9] - The company implemented a global $1 price hike on August 1, yet 75% of its product portfolio remains priced at $10 or less, maintaining its value positioning [3][4] Tariff Impact and Future Outlook - Easing tariff comparisons later in the fiscal year are expected to provide margin relief, as e.l.f. Beauty anticipates a lower average tariff rate moving into the next year [4][9] - Despite current profitability challenges due to tariffs, strong demand and effective pricing strategies position e.l.f. Beauty for potential margin recovery in the future [4] Industry Comparison - Coty Inc. reported a 100-basis-point decrease in adjusted gross margin to 64.5%, with tariffs being a significant factor affecting profitability [5] - The Estee Lauder Companies Inc. saw a gross margin expansion of 60 basis points to 73.3%, but also expects tariff-related challenges amounting to approximately $100 million for the fiscal year [6] Stock Performance and Valuation - e.l.f. Beauty's stock price has declined by 38.9% year-to-date, contrasting with the industry's decline of 1.1% [7] - The company trades at a forward price-to-earnings ratio of 32.48, which is higher than the industry average of 26.4 [10] - The Zacks Consensus Estimate indicates a year-over-year earnings decline of 13.6% for fiscal 2026, with a projected growth of 27.3% for fiscal 2027 [13]

Core Insights - e.l.f. Beauty, Inc. (NYSE:ELF) is recognized as one of the 12 oversold global stocks to invest in [1] - Morgan Stanley's Dara Mohsenian reaffirmed a "Buy" rating for e.l.f. Beauty with a price target of $121, reflecting strong market performance and growth potential [2] - Recent U.S. scanner data indicates a 15.3% year-over-year sales growth over the last two weeks [2] Sales Performance - The most recent week recorded a 13.8% increase in sales, supported by a 15.7% rise in weighted average pricing [3] - e.l.f. Beauty achieved an 85-basis-point year-over-year gain in market share [3] - Velocity increased by 11.8% year-over-year over the past four months, indicating consistent competitive strength [3] International Expansion - On November 20, 2025, e.l.f. Beauty announced its entry into the Gulf Cooperation Council (GCC) region through a partnership with Sephora [4] - The GCC region has the highest social media penetration rates globally, with social mentions exceeding 38% [4] - This expansion aligns with e.l.f. Beauty's goal of making beauty accessible globally while enhancing its strong U.S. performance [4] Product Focus - e.l.f. Beauty is dedicated to creating accessible, clean, vegan cosmetics and skincare products [5]

Core Viewpoint - E.l.f. Beauty is facing challenges in a tough market environment, but it continues to grow and gain market share despite recent stock performance issues [1][2]. Group 1: Company Performance - E.l.f. Beauty has reported sales growth while much of the cosmetics industry is under pressure, guiding for full-year growth of 18% to 20% in the 2026 fiscal year [4]. - The company remains popular among consumers, being the favorite teen cosmetics brand for the eighth consecutive year and gaining traction across multiple generations [4]. - However, earnings per share (EPS) have significantly decreased from $0.33 to $0.05 in the fiscal second quarter, indicating challenges in maintaining profitability [5]. Group 2: Market Environment - The overall discretionary spending is down, impacting E.l.f.'s organic performance, and the company is heavily affected by tariffs due to 80% of its products being produced in China [2]. - Despite the challenges, the lower-cost nature of E.l.f.'s products may attract customers switching from premium brands [3]. Group 3: Stock Performance - E.l.f. stock has seen a decline of 45% over the past year, but it has outperformed the S&P 500 over longer periods, with total returns of 71% over three years and 216% over five years [8]. - The current price-to-earnings ratio of 50 suggests that the market still sees strong long-term prospects for the company [9].

Core Viewpoint - e.l.f. Beauty, Inc. is currently facing challenges, including tariff issues and high short interest, which have led to a decline in stock performance, despite its potential as an investment [1][2]. Group 1: Company Overview - e.l.f. Beauty, Inc. operates in the cosmetics and skincare sector, offering products under various brands such as e.l.f. Cosmetics, e.l.f. Skin, Well People, Naturium, and Keys Soulcare [2]. - The company's market capitalization is currently approximately $4.6 billion, which is perceived as low given its brand potential [2]. Group 2: Investment Sentiment - Jim Cramer expressed a belief in the company's potential, suggesting it could be a buy despite acknowledging recent operational mistakes related to cost structure [2]. - There is a contrasting view that other AI stocks may present greater upside potential and lower downside risk compared to e.l.f. Beauty [2].

Core Insights - The article discusses three mid-cap stocks with potential for significant growth, specifically CRISPR Therapeutics, Viking Therapeutics, and e.l.f. Beauty, which have market caps between $2 billion and $10 billion [1][2]. CRISPR Therapeutics - CRISPR Therapeutics has a market cap of approximately $5.2 billion and offers an approved gene therapy treatment, Casgevy, for sickle cell disease and transfusion-dependent beta thalassemia, valued at over $2 million per treatment [3][5]. - The rollout of Casgevy has been slow, with around 300 patients referred to treatment centers, leading to investor disappointment; the company has reported net losses of $451 million over the past nine months [5][6]. Viking Therapeutics - Viking Therapeutics, with a market cap of around $4.3 billion, is developing a GLP-1 weight loss drug, VK2735, which is currently in phase 3 trials [7][8]. - In earlier trials, VK2735 helped participants lose up to 14.7% of their body weight in 13 weeks; the potential market for GLP-1 drugs could reach $95 billion by 2030 [10][11]. - Viking has incurred losses exceeding $237 million over the past year and does not currently generate revenue, making it a higher-risk investment [11]. e.l.f. Beauty - e.l.f. Beauty has a market cap of approximately $4 billion and is popular among teens, ranking as the top cosmetics brand with a 36% mindshare in a recent survey [12]. - The company projects revenue of around $1.6 billion and adjusted net income of at least $165 million for the year, despite share prices dropping over 40% due to tariff exposure from manufacturing 80% of its products in China [13][14]. - e.l.f. has raised prices on many products by $1, which may help it navigate current challenges; if tariffs are resolved, the stock could see significant growth [14].

Revenue Performance - e.l.f. Beauty reported a 14% year-over-year increase in net sales for FY26Q2, reaching $344 million, driven by the Rhode brand acquisition contributing approximately $52 million (about 17 percentage points) to sales growth[2][9] - Excluding Rhode, comparable sales decreased by approximately 3% due to a temporary halt in shipments to some retailers following a price increase effective August 1[2][9] Profitability and Margins - Gross margin for the quarter was 69%, down 190 basis points year-over-year, primarily impacted by increased tariffs on imported goods from China[2][9] - Adjusted EBITDA was $66.2 million, with a margin of 19%, reflecting a 4% decline year-over-year; adjusted net income was $41.7 million, with diluted earnings per share at $0.68, down from $0.77 in the same period last year[2][9] Full-Year Guidance - For FY26, the company projects net sales between $1.55 billion and $1.57 billion, representing an 18%-20% year-over-year growth, with Rhode expected to contribute approximately $200 million[3][10] - Management anticipates gross margin improvement to approximately 71% in the second half, up roughly 200 basis points sequentially, driven by pricing adjustments and Rhode's contribution[3][10] Tariff and Supply Chain Challenges - Approximately 75% of products sourced from China are subject to a 45% tariff rate, with each 10-percentage-point increase in tariffs estimated to impact annual gross profit by about $17 million[4][11] - Despite facing significant tariff headwinds, the company expects full-year gross margin to decline by only about 100 basis points due to price increases and product mix optimization[4][11] Market Position and Brand Growth - The core e.l.f. brand continues to gain market share, with consumption growth of 7% in Q2, approximately three times the category growth rate, and a market share increase of 140 basis points[5][12] - e.l.f. ranked as the top favorite teen makeup brand for the eighth consecutive time in Piper Sandler's survey, indicating strong brand recognition and loyalty[5][12] International Expansion - International sales grew by 2% year-over-year in Q2, with plans to launch in new markets including Rossmann Poland and Sephora in GCC countries[5][12] - Current international sales account for approximately 20% of total sales, suggesting significant growth potential compared to peers[5][12] Brand Building and Operational Efficiency - e.l.f. has enhanced brand influence through a "disruptive marketing engine," with unaided brand awareness increasing significantly over the past five years[6][13] - The successful transition to a new SAP system is expected to improve operational efficiency and support future scaling[6][13]

Core Insights - e.l.f. Beauty has launched its products in the Gulf Cooperation Council (GCC) region, partnering exclusively with Sephora to enhance its international presence [1][3] - The GCC is identified as the most requested region for e.l.f. products among areas without retail presence, with social media mentions increasing by 38% [2] - The launch includes a marketing campaign titled 'eyes.lips.finally' aimed at engaging the local community and promoting e.l.f.'s commitment to quality and affordability [2][3] Company Expansion - e.l.f. Beauty's non-U.S. sales accounted for approximately 20% of total net sales in the second quarter of FY26, indicating a strong international growth strategy [4] - The partnership with Sephora, which began in 2024 with a launch in Mexico, will see e.l.f. products available in all 70 Sephora stores across the GCC starting November 21 [3] Marketing Strategy - e.l.f. is utilizing high-visibility marketing tactics in the GCC, including outdoor advertising along Dubai's Golden Boulevard and digital screen takeovers in major malls [2] - The company aims to connect with the community through its marketing efforts, emphasizing its mission to make beauty accessible to everyone [5]

Group 1 - The meeting features e.l.f.'s management team, including Chairman and CEO Tarang Amin and CFO Mandy Fields [1] - The session is hosted by Bonnie Herzog, an analyst from Goldman Sachs specializing in beverages, household and personal care, nicotine, and convenience stores [1] - The meeting aims to discuss the company's performance and strategic direction [3]

Summary of e.l.f. Beauty Fireside Chat - November 14, 2025 Company Overview - **Company**: e.l.f. Beauty (NYSE: ELF) - **Key Speakers**: Tarang Amin (Chairman and CEO), Mandy Fields (CFO) Key Points Industry and Market Trends - The U.S. mass beauty market has shown a growth of 2% in the last quarter, consistent with a decade-long trend [3][4] - e.l.f. has gained 160 basis points of market share recently, marking 27 consecutive quarters of market share gains [3][4] - e.l.f. is the number one unit share brand and number two dollar share brand in the beauty market, with significant potential for future growth [4] Financial Performance - e.l.f. experienced a surprising stock price pullback following FQ2 results, which the management deemed an overreaction [2] - The company repurchased $50 million of shares, reflecting confidence in its business fundamentals [2] - Organic sales declined by 3% in FQ2, primarily due to a strategic decision to halt shipments to certain retailers [6][12] - Consumption trends remained strong, with a 7% increase in consumption despite shipment issues [16][20] Shipment and Inventory Management - The decision to stop shipments was a tactical move to ensure retailers reflected the correct pricing after a price increase [7][10] - Normal shipment patterns resumed post-Q2, with no lingering issues expected in FQ3 [13][20] - The company anticipates that shipments will continue to lag behind consumption in the second half of the year due to previous expansions in retail space [15][16] International Expansion - International growth was reported at 2% in FQ2, impacted by the previous year's launch at Rossmann [14][47] - The U.K. market has faced challenges due to increased promotional activity from competitors, but e.l.f. continues to gain market share [48] - Future growth is expected from markets like Germany and the GCC, with significant expansion plans in place [44][50] Product Innovation and Pricing Strategy - e.l.f. plans to launch new products in spring 2026, with expectations of strong performance following previous successful launches [27][78] - A 15% price increase was implemented, with management pleased with the resulting consumption trends [74] - The company maintains a strong value proposition, with 75% of its portfolio priced at $10 or less [80] Acquisition of rhode - The acquisition of rhode is seen as a strategic move to enter the prestige beauty segment, with strong initial sales performance [81][84] - rhode is expected to contribute positively to e.l.f.'s overall margins and growth trajectory [56][58] - The brand has shown significant momentum in retail launches, outperforming previous records at Sephora [82][84] Gross Margin and EBITDA Outlook - e.l.f. expects a 200 basis point sequential improvement in gross margins for the second half of the year, despite tariff challenges [55][63] - Marketing spend is projected to increase in the second half, impacting EBITDA margins but aimed at driving long-term growth [62][63] Technology and AI Integration - e.l.f. is in the early stages of leveraging AI for operational efficiencies, particularly in marketing and consumer engagement [68][71] Conclusion - e.l.f. Beauty remains optimistic about its growth prospects, driven by strong consumption trends, strategic pricing, and innovative product launches, alongside the successful integration of rhode into its portfolio [39][84]

Core Viewpoint - e.l.f. Beauty, Inc. is currently viewed as a potentially undervalued stock, with a market capitalization of $4.6 billion, despite recent challenges and volatility in its trading performance [1][2]. Group 1: Company Overview - e.l.f. Beauty, Inc. operates in the cosmetics and skincare sector, offering products under brands such as e.l.f. Cosmetics, Well People, Naturium, and Keys Soulcare [2]. - The company is based in Oakland and is recognized for its value-oriented approach to cosmetics [2]. Group 2: Market Performance - The stock has experienced a 9% increase for the year, although it has been characterized by volatility, partly due to its reliance on China for manufacturing [2]. - Despite the challenges, there is an expectation of further upside potential for the stock [2]. Group 3: Analyst Insights - Jim Cramer expressed a strong belief in the stock's potential, suggesting it is a buy despite acknowledging some past mistakes in cost structure [1]. - Cramer’s commentary indicates a divergence from the prevailing market sentiment, highlighting the stock's current low valuation as an opportunity [1].