Elf Beauty signaled a softer outlook for the coming year on Wednesday, forecasting full-year revenue and adjusted earnings below analysts' expectations while highlighting a potential $15 million to $20 million headwind in fiscal 2027 from higher oil prices linked to the U.S.-Israeli war with Iran.
The cosmetics company nonetheless posted a stronger-than-expected finish to its fiscal year. Fourth-quarter net sales rose 35% to $449.3 million, topping analysts' estimates of $423.1 million. Quarterly adjusted earnings per share came in at $0.32, above the $0.29 analysts had forecast. Shares rose roughly 6% in extended trading following the results and guidance.
For the full fiscal year, Elf projects net sales in a range of $1.84 billion to $1.87 billion. The midpoint of that range sits below the analysts' average estimate of $1.87 billion, according to LSEG data. The company expects annual adjusted earnings to be $3.27 to $3.32 per share, also beneath the consensus forecast of $3.61.
The company said it has not incorporated the potential impact of surging oil prices into its guidance. "We have cost-savings programs that we believe can help offset" the effect, Chief Financial Officer Mandy Fields said in an interview. Fields added that expected tariff refunds could provide additional relief.
Elf sources about 75% of its production from China and has been affected by import tariffs that were introduced under former U.S. President Donald Trump and later struck down by the Supreme Court. Fields said the company paid roughly $58.5 million in tariffs and is working to recoup those amounts.
Elf noted that its product mix — with about 75% of items priced at $10 or less — has helped it benefit from demand among price-conscious shoppers even as macroeconomic conditions remain uncertain. Fields said consumers are continuing to spend on beauty and that the company is not "seeing the trade down effect right now."
Financial highlights
- Fourth-quarter net sales: $449.3 million (up 35%)
- Fourth-quarter adjusted EPS: $0.32 (vs. $0.29 estimate)
- Full-year net sales guidance: $1.84 billion to $1.87 billion (midpoint below $1.87 billion consensus)
- Full-year adjusted EPS guidance: $3.27 to $3.32 (vs. $3.61 consensus)
The company faces a mix of near-term operational and market uncertainties. It is seeking cost efficiencies and pursuing tariff refunds as mitigation steps, while acknowledging possible revenue impact if oil prices remain elevated due to geopolitical tensions.