Assessing Price Reductions; Direction in Core Elf Key to the Story

Research evidence excerpt

Assessing Price Reductions; Direction in Core Elf Key to the Story

ce cut on average) and Halo Glow (5 SKU's lowered out Market Cap. (mil) US$3,371.0

Total Assets ($mil) 493 of 20, 4% price cut on average); in Skin, ELF has not taken any reductions except in

Avg Daily Vol (000) 3,188

holy grail Bronzing Drops (by $2, or 15%), despite higher ASP than in Makeup, which Book Value/Share US$9.21

signals more mature share as opposed to an absolute price level. See Exhibits 2-3. Price/Book 631%

Foundation & Face, Elf's 2nd largest category (~20% share), saw share gains turn to Net Cash Per Share US$(1.33)

losses the past 3 months--and this category is seeing the most price reductions so far, Debt to Total Capital 24.3%

potential proof point that volume declines are due to maturity. Pricing rollback is viewed Div (ann) US$0.00

as temporary (over ~12-week period), and company will adjust ticket accordingly L/T-- Fiscal Year End Mar

looking at Target, Elf''s largest customer, ticket has not come down, but the retailer is

Price Performance - 1 Year promoting the brand with Buy One Get one 25% off (with some items now priced below

Elf's own site and some above)--channel conflict is a consideration as pricing evolves. USD

• Competitive set: back on offense. Per ELF's comments on EPS calls, the brand gained 140

share in FY26, albeit the magnitude of the gains has moderated (from 200 bps+ in 120

FY25 to 115 bps in FY26, with each quarter subsequently flattening out); per scanner 100

data we look at, Elf's share gains reversed to losses in April and May. At the same

time, L'Oreal began regaining last Summer (per management, inflection seen in North 80

America especially in makeup starting in 3Q25), and NYX is seeing steady growth 60

(Exhibit 1). Continued on the next page. 40