e.l.f. Beauty surges on 71% EPS beat, raises fiscal 2026 outlook
Cosmetics maker delivers 38% sales growth with market share gains as analyst optimism builds
e.l.f. Beauty shares rallied in extended trading Tuesday after the cosmetics maker crushed third-quarter earnings expectations and raised its full-year outlook, highlighting continued momentum in a competitive beauty market.
The Oakland-based company reported adjusted earnings per share of $1.24 for the fiscal third quarter, dramatically surpassing analyst estimates of $0.72—a 71.4% beat that underscores the strength of its value-priced product strategy. Revenue reached $489.5 million, exceeding the $461.8 million consensus forecast, according to regulatory filings.
The company's performance was driven by robust 38% net sales growth year-over-year, coupled with significant market share gains of 130 basis points. Adjusted EBITDA surged 79% compared to the prior-year period, demonstrating improving operational leverage as the company scales its affordable beauty product lines across multiple channels.
Buoyed by the strong quarterly results, management lifted fiscal 2026 guidance significantly. The company now anticipates sales growth of 22-23%, up from the previous range of 18-20%. Adjusted EBITDA expectations were raised to $323-326 million, compared to earlier projections of $302-306 million.
The upbeat guidance reflects confidence in e.l.f.'s ability to maintain its growth trajectory despite macroeconomic pressures that have weighed on some consumer discretionary spending. The company's focus on accessible price points and rapid product innovation has helped it capture share from higher-priced competitors in the mass market beauty segment.
e.l.f. Beauty's market capitalization stands at approximately $5.1 billion, with the stock trading at $84.63 as of Tuesday's close. Despite recent volatility, the company maintains strong analyst support, with a consensus target price of $112.86 representing substantial upside from current levels. Of the 16 analysts covering the stock, 12 rate it a buy and four recommend hold, with no sell ratings.
The company's forward price-to-earnings ratio of 24.57 reflects growth expectations that remain elevated compared to traditional consumer staples, though the multiple has compressed from its 52-week high of $150.99. The stock remains volatile, with beta of 1.68 indicating higher sensitivity to market movements.
e.l.f.'s portfolio includes its namesake e.l.f. Cosmetics brand alongside newer acquisitions such as W3LL PEOPLE and Keys Soulcare, positioning the company across multiple beauty categories and price points. The diverse brand strategy has helped drive customer acquisition and retention across different demographic segments.
The strong quarterly performance comes amid broader challenges in the retail sector, where many beauty and personal care companies have seen demand soften. e.l.f.'s ability to deliver accelerating growth while expanding margins suggests its value proposition is resonating with cost-conscious consumers seeking quality products at accessible prices.
Looking ahead, investors will be watching for continued execution on the company's market share gains and whether e.l.f. can maintain its elevated growth rate through the remainder of fiscal 2026. The raised guidance sets a high bar, though management's confidence suggests momentum remains strong heading into the critical holiday selling season.