e.l.f. Beauty on Wednesday released fourth-quarter results that outpaced Wall Street expectations but cautioned that its outlook for the coming fiscal year is pressured by rising oil prices related to the U.S.-Israeli war with Iran. Management said the conflict could translate into a $15 million to $20 million impact in fiscal 2027.
Shares of the cosmetics company climbed roughly 6% in extended trading after the company reported fourth-quarter sales and adjusted earnings that exceeded analyst estimates. The market reaction reflected the quarterly beat even as the company set conservative guidance for the year ahead.
Chief Financial Officer Mandy Fields noted the company is pursuing internal cost-savings programs intended to offset some of the headwinds and indicated that tariff refunds could help mitigate the financial effect. e.l.f. has said it paid about $58.5 million in tariffs and is working to recover those amounts.
Production concentration remains a notable element of the company's cost profile. e.l.f. depends on China for approximately 75% of its manufacturing, a factor that has exposed it to earlier import duties imposed under the previous U.S. administration and later struck down by the Supreme Court.
For the full fiscal year, e.l.f. projects net sales in a range of $1.84 billion to $1.87 billion. The midpoint of that range sits below the analyst average estimate of $1.87 billion, according to LSEG data. The company also forecast annual adjusted earnings per share between $3.27 and $3.32, below the consensus view of $3.61.
Despite the cautious outlook, the company highlighted resilient demand at its price points. Approximately 75% of e.l.f.'s product assortment is sold at $10 or less, which management says continues to attract cost-conscious consumers amid broader economic uncertainty.
"All five of our brands grew this year, with rhode and Naturium delivering particularly strong results and reinforcing the power of our expanding brand portfolio. The whitespace opportunity in front of us across brands, categories, and geographies gives us great confidence in the runway ahead," said Tarang Amin, chief executive officer of e.l.f.
On a reported basis, e.l.f. posted a 35% increase in fourth-quarter net sales to $449.3 million, compared with the consensus estimate of $423.23 million. Quarterly adjusted earnings per share were $0.32, beating the analyst estimate of $0.29 by $0.03.
While the quarterly performance demonstrated strength in consumer demand and brand traction, the company’s forward guidance highlights sensitivity to external cost pressures, including those linked to geopolitical events and trade-policy developments. Management is pursuing cost-reduction initiatives and tariff recoveries as partial offsets to those pressures.