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In its earnings report released Feb. 4, the company announced 38 percent net sales growth for the third quarter and raised its full-year forecast. Sales reached $489.5 million for the quarter.
“The fastest-growing brand was certainly Rhode,” chief executive Tarang Amin told The Business of Beauty, saying the label’s total annual growth has reached 70 percent. “It’s exceeded every expectation anyone had for the brand.” He noted that Rhode is currently Sephora North America’s top-selling brand, while its third-quarter debut at Sephora UK was the retailer’s largest. Rhode is expected to bring in $260 to $265 million in net sales for the fiscal year, amounting to over $360 million annually counting pre-acquisition sales.
Without sharing sales numbers, Amin said that all other portfolio brands, including E.l.f. Cosmetics and Naturium, increased sales for the quarter. E.l.f. Cosmetics “grew consumption double where the category was growing.”
A growth deceleration has dented the company’s share prices in the past year, as 14 percent growth in its previous fiscal quarter fell below analyst expectations. It continued to be hit by tariffs in the third quarter, which decreased its gross margin by 30 basis points to 71 percent.
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Adaptations to tariffs have included price increases, shifting production locations and more aggressive international expansion, said Amin of its portfolio brands.
Price increases implemented across the portfolio earlier in the year have affected unit movement, while overall sales remain “quite strong,” he said.
Guidance for the 2026 fiscal year was raised to between 22 and 23 percent growth in net sales growth for the first nine months of the fiscal year has reached 21 percent with over $1.18 billion in sales.
International expansion will continue for portfolio brands in the next quarter, with Rhode headed to Australia via Mecca.
Following a fragrance collaboration between E.l.f. Beauty and H&M, Amin emphasised that the company is still focused most heavily on skincare and cosmetics.
“Our brands have the ability of expanding into other spaces, but we also want to be disciplined in how we do that,” he said.
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E.l.f. Beauty Shares Plunge as Sales Fall Short
Strong demand for Rhode boosted the company’s growth to 14 percent in its latest quarter, but a below-forecast sales outlook caused shares to drop as much as 29 percent.
