e.l.f. Beauty shares opened lower in pre-market trading after the cosmetics maker reported fiscal first-quarter 2027 results that beat headline expectations but raised questions about the durability of the beat. The stock was sliding about 1.8% in pre-open activity following results released after Wednesday’s close.
The company reported adjusted earnings per share of $1.75 versus a consensus estimate near $0.73. Revenue came in at $479.4 million, topping the roughly $430.8 million expected and representing year-over-year growth of 36%.
Investors, however, honed in on the composition of those results. Gross margins expanded to 83%, up about 1,400 basis points year over year, but roughly 1,050 basis points of that margin improvement were attributable to approximately $50 million in IEEPA tariff refunds. Market participants treated that refund as a one-time event that inflated margins for the quarter rather than reflecting an ongoing operational improvement.
Separately, the Rhode acquisition contributed roughly $160 million to the quarter. Removing Rhode’s contribution, the legacy e.l.f. business registered organic net sales that declined in the high single digits - a detail that weighed heavily on sentiment and suggested softness in the core brand.
Analysts offered mixed reinforcement. Goldman Sachs raised its price target to $100 while keeping a Buy rating. Bernstein, which had upgraded the stock to Outperform the previous day and set a $113 target, highlighted e.l.f.’s hair care launch as a genuine incremental growth catalyst.
Company guidance was revised upward: management now expects fiscal 2027 net sales in a range of $1.94 billion to $1.97 billion and raised its adjusted EPS outlook to $3.50 to $3.55. Market observers noted that the improved guidance was largely dependent on the Rhode acquisition’s contribution.
Broader market moves offered little help to the stock. The Nasdaq edged down, while the S&P 500 and the Dow posted only marginal gains, leaving consumer discretionary and beauty-sector names without a meaningful macro tailwind. Quoted intraday data in the report showed US500 -0.17%, DJI +0.49%, and IXIC -0.83%; a data line in the report also reflected ELF down about 1.67%.
e.l.f.’s 52-week trading range, from $48.82 to $150.99, underscores the significant re-rating the shares have experienced over the past year amid tariff uncertainty and softness at the core brand.
Bottom line: While headline EPS and revenue beat consensus by a wide margin, the reliance on a roughly $50 million one-time tariff refund and the decline in legacy brand organic sales left investors cautious, and the stock slipped in pre-market trade despite upgraded analyst targets and lifted guidance.