U.S. Beverages, Household & Personal Care Relative Valuation Recovery on Rotation but Fundamentals Remain Lackluster

研报英文原文证据摘录

U.S. Beverages, Household & Personal Care Relative Valuation Recovery on Rotation but Fundamentals Remain Lackluster

e.l.f. Beauty (ELF, OW) – Bull/Bear Debate

Bull Bear

◼ rhode acquisition (a profitable business) for $800M (+$200M ◼ Initial FY27 guidance calls for a significant deceleration in

earn-outs) continues to beat expectations & is projected to be base business. However, this does not include any potential

accretive top to bottom line upside from initiatives (price discovery exercise and pulling

additional innovations prior to the holiday season not initially

◼ ELF’s pricing action of $1 across all SKUs and geographies part of FY27 plans) or tariff refunds

effective last August 1st mitigated incremental tariffs but resulted

E in units decline. Despite this, initial FY27 guidance calls for gross ◼ Core consumer base is disproportionately impacted by the

D

IU margin to be at ~71% level in FY27 challenging macroeconomic backdrop

G

T ◼ Tracked channel shows base business decelerated to +HSDN ◼ ELF sources substantially from China and FY27 outlook

E (L13W), but still performing well above underlying color cosmeticsM assumes 35% tariffs in FY27 (albeit better than average 55%

T category and peersS in FY26)

E

V ◼ Potentially receiving $58.5M from IEEPA tariff refunds to be

N

I reinvested in the business

:

R J.P. Morgan View: Growth Ahead with rhode’s Further Expansion (Domestic + International) and Core e.l.f. Brand Internationally

A

C

LA ◼ The rhode acquisition shows continued momentum, not to mention the significant upside potential from further expansion into international

O markets given 74% of rhode’s social followers are outside the U.S and rhode is available in less than 20% of Sephora’s global stores. For

S