e.l.f. Beauty: FQ1 flaws to clear up in F27; reiterate Buy

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e.l.f. Beauty: FQ1 flaws to clear up in F27; reiterate Buy

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e.l.f. Beauty

FQ1 flaws to clear up in F27; reiterate Buy

Reiterate Rating: BUY | PO: 85.00 USD | Price: 50.72 USD

F27 guidance better than expected; addressing FQ1 issues 20 May 2026

ELF’s F27 guidance included net sales growth of +12-14% y/y, with Rhode contributing Equity

9% to net sales growth, and organic net sales expected +4-5% y/y. FQ1 quarter-to-date

(QTD) consumption trends are weak, with organic net sales down high single digits (HSD

Key Changes%) due to innovation not resonating well and lapping a strong shipment period ahead of

the upgrade to SAP. Organic net sales growth is expected to rebound sharply in FQ2, in (US$) Previous Current

the mid-teens range, as the Rhode acquisition anniversaries and ELF laps the temporary Price Obj. 93.00 85.00

halt of shipments from the year ago period related to pricing implementations. We 2027E Rev (m) 1,887.4 1,885.2

adjust our FQ1/F27E organic net sales estimates to -9% and +5% y/y. We model F27E 2028E Rev (m) 2,047.2 2,046.0

gross margins flat y/y (in-line with guidance). Our F27E adj. EBITDA estimate moves to 2027E EPS 3.80 3.38

$386m from $399m prior. Overall, we view ELF’s initial guidance as encouraging given 2028E EPS 4.23 3.79

challenging trends QTD and plans to improve volumes with targeted strategies. 2029E EPS 4.77 4.35

Rolling back pricing the right strategy to win on volume Anna Lizzul

Innovation has fallen short of expectations QTD, and ELF sees the consumer as cost Research Analyst

BofAS

burdened following its $1/unit price increase from August 2025. ELF plans to deliver +1 646 855 2569

better value with pricing reductions across certain SKUs. ELF saw success with its anna.lizzul@bofa.com