Group 1 - e.l.f. Beauty's Q1 FY 2026 quarterly results led to a sharp decline in stock price post-market, indicating market concerns over slowing core growth and margin pressures [1] - The company has withdrawn its full-year guidance, which has further contributed to investor anxiety regarding decreasing profits [1] Group 2 - Analysts are focusing on the implications of the company's performance on the broader beauty industry, particularly in terms of growth trends and competitive positioning [1]

Company Overview & Strategy - E l f Beauty initially sold affordable makeup products online and grew into a multi-million dollar company, partnering with retailers like Target [6] - The company's strategy is fueled by marketing and offering dupes of popular prestige products at bargain prices [8] - E l f adapts and creates new products based on customer feedback monitored on social media [12][13] - The company shifted production away from China to diversify its supply chain, moving from 100% to 75% sourced from China [15] Financial Performance & Market Position - E l f posted its first billion-dollar year in May 2024 after sales spiked 77% [3] - In fiscal year 2025, net sales grew by 28% to $13 billion, with international sales also growing by 28% [21] - E l f was the number one color cosmetics brand by units sold and number two by dollar share in 2024 [21] Acquisition & Expansion - E l f acquired Hailey Bieber's skincare brand Rhode in a $1 billion deal [2][23] - Rhode grew to $212 million in net sales in three years and more than doubled its customer base in fiscal year 2025 [24] - The Rhode deal was financed with $600 million of debt [26] Challenges & Risks - Heavy reliance on China caused profits to drop 30% in Q1 2026 [4] - Tariffs are expected to increase the cost of goods sold by at least $50 million annually, potentially causing net income and profits to each fall 30% [28]

HAUPPAUGE, N.Y., Aug. 08, 2025 (GLOBE NEWSWIRE) -- United-Guardian, Inc. (NASDAQ:UG) announced today the financial results for the second quarter and first half of 2025. Second quarter net sales decreased from $3,390,205 in 2024 to $2,838,225 in 2025, with net income decreasing from $956,225 ($0.21 per share) to $626,826 ($0.14 per share). As compared with the first quarter of 2025, the second quarter net sales increased by 14% and net income increased by 12%. Net sales for the six-month period ended June 3 ...

Core Viewpoint - The beauty industry is experiencing a shift where traditional giants are being challenged by agile "white label" players, particularly in niche segments that have been overlooked by major brands, leading to significant growth in these areas [3][4]. Market Trends - The online beauty market has seen multiple niche categories with transaction growth rates exceeding 50% in the first half of the year, driven primarily by white label brands rather than mainstream giants [7][8]. - Eight beauty subcategories have shown remarkable growth, including body makeup, men's hair care, and foot care, with white label brands playing a crucial role in this expansion [7][8]. Performance Data - Specific high-growth categories include: - Body makeup: 0.36 billion, up 767.92% - Men's hair care: 5.12 billion, up 131.50% - Foot care: 8.04 billion, up 102.48% - Neck care: 7.60 billion, up 73.51% - T-zone care: 8.46 billion, up 69.00% - Men's makeup: 2.00 billion, up 53.57% [8][11]. Competitive Landscape - White label brands have a significant presence in the top 10 rankings of various high-growth categories, particularly in neck care and foot care, indicating their ability to capture market share in less saturated segments [11][12][15]. - The neck care market, for instance, has seen a 73.51% year-on-year growth, with approximately 70% of the top brands being white labels [11][18]. Consumer Insights - The rise of white label brands in niche markets suggests a deeper understanding of consumer needs and a successful strategy to address previously unmet demands [29][32]. - The marketing strategies employed by these brands often focus on "appearance anxiety" and emphasize product efficacy, resonating well with consumers [24][27]. Strategic Implications - The success of white label brands highlights the potential for innovation in product forms and marketing strategies to activate consumer demand in niche segments [29][30]. - Companies in the beauty industry should consider agile responses to market changes and leverage emerging platforms like Douyin for targeted marketing [31][32].

Financial Performance & Challenges - ELF Beauty's stock experienced a nearly 10% decrease despite delivering a top and bottom-line beat [1][2] - Management declined to issue a full-year forecast due to tariff uncertainties, suggesting potential margin pressure [2] - The company has increased prices by approximately $1 due to tariffs and other cost pressures [5] Market Share & Growth Strategy - ELF Beauty achieved its 26th consecutive quarter of net sales and market share gains in the US cosmetics market [4] - The company is focused on growing market share and pursuing white space opportunities [5] - ELF Beauty is the number one brand amongst Gen Z and is gaining consumers across all age brackets [18] Expansion & Partnerships - Road is joining the ELF Beauty family and will be available in all US and Canadian Sephora stores in September, followed by the UK later this year [8] - ELF Beauty is expanding its partnership with Sephora by introducing ELF in six Gulf cooperation countries and launching a brand experience in Sephora Australia [9] - ELF Beauty is launching in Dollar General, serving an underserved market, with 60% of ELF purchasers being new to cosmetics purchases at Dollar General and 53% being new to ELF [12] Supply Chain & Cost Management - ELF Beauty has been optimizing its supply chain, reducing its production in China from 100% to approximately 75% [15] - The diversification of the supply chain is driven by strong global demand rather than solely by tariffs [15] Competitive Advantage - ELF Beauty aims to make the best of beauty accessible for every eye, lip, and face [17] - ELF Beauty offers superior value, with 75% of its portfolio priced at $10 or less even after the price increase [6][7] - ELF Beauty's vitamin E, C, and ferulic serum is priced at $16, significantly lower than a comparable prestige item at $185 [19]

Core Insights - e.l.f. Beauty, Inc. reported better-than-expected first-quarter results, with earnings of 89 cents per share, surpassing the Street estimate of 84 cents, and quarterly revenue of $353.73 million, exceeding the analyst consensus of $349.43 million, and up from $324.47 million in the same period last year [1][2]. Financial Performance - Quarterly earnings were 89 cents per share, beating the estimate of 84 cents [1]. - Revenue for the quarter was $353.73 million, exceeding the consensus estimate of $349.43 million and up from $324.47 million year-over-year [1]. Market Position - The company gained 210 basis points in market share during the first quarter, continuing a trend of consistent growth over the past 26 quarters [2]. - The CEO highlighted the combination of value proposition, innovation, and marketing as key drivers of the company's performance [2]. Stock Performance - Following the earnings announcement, e.l.f. Beauty shares dipped 9.5% to $99.94 [2]. Analyst Ratings and Price Targets - Morgan Stanley maintained an Equal-Weight rating and raised the price target from $105 to $114 [8]. - Goldman Sachs maintained a Buy rating and increased the price target from $120 to $137 [8]. - UBS maintained a Neutral rating but lowered the price target from $120 to $112 [8].

Market Overview - Major indexes showed mixed performance with the Dow up +81 points (+0.19%), S&P 500 up +45 points (+0.73%), Nasdaq up +252 points (+1.21%), while the Russell 2000 fell -4.38 points (-0.20%) [1] - Over the past month, three of the four major indexes are in the green, with only the Dow in the red [2] Company Earnings Reports - **DoorDash (DASH)** reported Q2 earnings of $0.65 per share, exceeding expectations by nearly +55%, with revenues of $3.3 billion, a +25% year-over-year growth, and total orders increasing by +20% to 761 million [3] - **Airbnb (ABNB)** posted Q2 earnings of $1.03 per share, slightly above estimates, with revenues of $3.1 billion, surpassing the anticipated $3.04 billion and reflecting a +13% year-over-year growth [4] - **Applovin (APP)** achieved Q2 earnings of $2.39 per share on revenues of $1.26 billion, both figures exceeding estimates, marking the company's ninth consecutive earnings beat, although shares fell over -6% post-announcement [5] - **e.l.f. Beauty (ELF)** reported fiscal Q1 earnings of $0.89 per share on $354 million in sales, slightly above expectations, but noted a -30% net income overall due to reliance on Chinese products [6] - **Duolingo (DUOL)** saw shares rise +22% after reporting Q2 earnings of $0.91 per share, significantly above the expected $0.55, with revenues of $252.3 million, a +41% year-over-year growth, and Daily Active Users increasing by +40% to 47.7 million [7]

Group 1 - e.l.f. Beauty reported quarterly earnings of $0.89 per share, exceeding the Zacks Consensus Estimate of $0.84 per share, but down from $1.1 per share a year ago, representing an earnings surprise of +5.95% [1] - The company achieved revenues of $353.74 million for the quarter ended June 2025, surpassing the Zacks Consensus Estimate by 0.23% and up from $324.48 million year-over-year [2] - e.l.f. Beauty has surpassed consensus EPS estimates three times and revenue estimates four times over the last four quarters [2] Group 2 - The stock has underperformed, losing about 12.5% since the beginning of the year, while the S&P 500 gained 7.1% [3] - The current consensus EPS estimate for the coming quarter is $0.77 on revenues of $356.31 million, and for the current fiscal year, it is $3.65 on $1.65 billion in revenues [7] - The Zacks Industry Rank indicates that the Cosmetics industry is currently in the bottom 33% of over 250 Zacks industries, which may impact stock performance [8] Group 3 - The estimate revisions trend for e.l.f. Beauty was mixed ahead of the earnings release, resulting in a Zacks Rank 3 (Hold) for the stock, suggesting it will perform in line with the market [6] - Future stock movements will depend on management's commentary during the earnings call and changes in earnings expectations [3][4]

Financial Data and Key Metrics Changes - In Q1 2026, net sales grew by 9% on top of a 50% growth in Q1 of the previous year, reaching $354 million [5][32] - Adjusted EBITDA was $87 million, up 12% year-over-year [5][34] - Gross margin for Q1 was 69%, down approximately 215 basis points compared to the prior year, primarily due to incremental tariff costs [33] - Adjusted net income was $51 million, or $0.89 per diluted share, compared to $64 million, or $1.10 per diluted share a year ago [35] Business Line Data and Key Metrics Changes - In color cosmetics, e.l.f. holds the number one unit share brand with approximately 15% share, and the number two share brand with approximately 13% share, more than double from three years ago [7][14] - Skincare now drives nearly 20% of global consumption, more than double the level from a few years ago [17] - The Halo Glow Skin Tint was the top-selling cosmetics product on e.l.f.'s website in Q1 [14][21] Market Data and Key Metrics Changes - International net sales grew by 30% in Q1, with significant growth in existing markets and expansion into new markets [23][25] - In the UK, e.l.f. Cosmetics outpaced category growth by three times in Q1, increasing its rank from the number four brand to the number three brand [23] - International sales have increased from $28 million six years ago to $266 million today, representing 20% of total sales [25] Company Strategy and Development Direction - The company aims to more than double its business over the coming years, focusing on color cosmetics, skincare, and international expansion [6][31] - The acquisition of Rhode is expected to enhance e.l.f.'s position in accessible beauty and drive brand awareness [26][27] - The company plans to leverage its marketing and innovation capabilities to continue gaining market share across segments [15][18] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the ability to continue gaining market share and capturing significant growth opportunities despite tariff uncertainties [26][40] - The company is monitoring consumer response to recent price increases and expects to maintain strong performance in the U.S. market [78][79] - Management highlighted the importance of innovation and value proposition in driving consumer engagement and sales growth [12][19] Other Important Information - The company ended the quarter with $170 million in cash, up from $109 million a year ago, and generated $20 million in free cash flow [35][36] - The transition to SAP was reported as successful, indicating strong operational capabilities [37][38] Q&A Session Summary Question: Can you talk about how much inventory might be trapped in at the 170% rate versus the 50% rate? - Management indicated that inventory consists of a mixture of tariff rates, with more of the 170% expected to flow through in Q2, leading to lower gross margins [45][46] Question: Can you expand on the greater than 9% sales growth for the first half? - Management confirmed that the addition of Rhode will help drive Q2 sales higher than Q1, with continued positive performance in the e.l.f. business [51][53] Question: What are your thoughts on the U.S. core business growth expectations? - Management remains optimistic about the U.S. business, expecting continued growth despite potential challenges from pricing and consumer behavior [64][66] Question: How have retail partners reacted to the price increases? - Overall acceptance of the price increase has been good, with transparency in communication contributing to positive feedback [81][82] Question: What is the expected revenue contribution from Road? - Management did not provide specific revenue figures but expressed confidence in Road's long-term accretive potential [124]

Financial Data and Key Metrics Changes - In Q1 2026, net sales grew by 9% following a 50% growth in Q1 2025, reaching $354 million [4][34] - Adjusted EBITDA increased by 12% to $87 million, with adjusted net income at $51 million or $0.89 per diluted share, down from $64 million or $1.10 per diluted share a year ago [34][37] - Gross margin for Q1 was 69%, down approximately 215 basis points year-over-year due to tariff costs [35] Business Line Data and Key Metrics Changes - In color cosmetics, e.l.f. holds a 15% unit share, making it the number one brand, with significant growth in market share over the past three years [6][13] - Skincare now accounts for nearly 20% of global consumption, more than double from previous years, with e.l.f. Skin and Naturium being the fastest-growing brands [16][20] - The Halo Glow Skin Tint was the top-selling product in Q1, showcasing the success of innovation strategies [10][13] Market Data and Key Metrics Changes - International net sales grew by 30% in Q1, with significant growth in the UK, where e.l.f. outpaced category growth by three times [26][28] - The company has expanded its presence in new markets, including a successful launch in over 1,200 stores in the Netherlands and Belgium [27][28] - International sales now represent 20% of total sales, up from 10% six years ago, indicating strong growth potential [28] Company Strategy and Development Direction - The acquisition of Rhode is expected to enhance e.l.f.'s position in the beauty market, with plans to accelerate brand awareness and expand distribution [5][30] - The company aims to double its business over the coming years by capitalizing on opportunities in color cosmetics, skincare, and international markets [5][29] - E.l.f. continues to focus on innovation and disruptive marketing to maintain its competitive edge in the beauty industry [14][20] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the ability to gain market share despite challenges from tariffs and a competitive landscape [29][41] - The company is monitoring consumer response to recent price increases and expects to see continued growth in the first half of the year [41][80] - Future guidance will depend on clarity regarding tariffs, with expectations for net sales growth above 9% in the first half of the year [41][43] Other Important Information - The company ended Q1 with $170 million in cash, up from $109 million a year ago, and generated $20 million in free cash flow [37][39] - E.l.f. is transitioning to SAP for its ERP system, which is expected to enhance operational efficiency [39][40] Q&A Session Summary Question: Can you talk about how much inventory might be trapped in at the 170% rate versus the 50% rate? - Management indicated that inventory consists of a mix of tariff rates, with expectations for more 170% inventory to flow through in Q2, leading to lower gross margins [46][48] Question: Can you expand on the greater than 9% sales growth for the first half? - Management confirmed that the addition of Rhode will contribute to higher sales growth in Q2, and they are optimistic about the e.l.f. business performance [54][56] Question: What channels or partners have been stronger or weaker in the U.S. market? - Management noted growth across brick-and-mortar and e-commerce channels, but did not provide specific details on weaker channels [90][92] Question: How is the company managing the Road acquisition and its impact on margins? - Management stated that while Road is expected to be accretive in the long term, there will be initial dilution in Q2 margins due to the lack of sell-in to Sephora [124][125] Question: Can you provide context on the gross margin expectations for Q2? - Management acknowledged that Q2 gross margins will be impacted by higher tariff costs, but pricing benefits from recent increases are expected to help offset some of this pressure [130][131]