e.l.f. Beauty Q3 2026 elf Beauty Inc Earnings Call | AllMind AI Earnings | AllMind AI
Q3 2026 elf Beauty Inc Earnings Call
Tarang Amin: I'm piling on my blade. I'm flying tonight. No, I don't give a damn, baby, damn, baby, oh, all right. I fix my eyes on your face, ready for anything. Spiritually, you and me, you and me. Flying free, you and me, you and me. I feel nothing when you cry 'cause you're crying for yourself. It's not that I'm insensitive, combative, yeah. Really not as complicated as you have made it out to be. Less hard than you seem. I'm piling on my blade.
Speaker #3: I'm flying tonight. No, I don't give a damn, baby. Damn, baby, wrong or right. I fix my eyes on your face. Ready for honesty.
Speaker #3: ye, you and me. You and me. Flying free, you and me. You and me. I feel nothing when you cry 'cause you're crying for yourself.
Speaker #3: Not that I'm insensitive. Combative, yeah. Feeling honest. Stare at complicated, as you have made it out to be. Let's start a new dream.
Speaker #3: I'm padding up my
Speaker #3: life. Thank you for joining us today to
Kacey Katten: Thank you for joining us today to discuss e.l.f. Beauty's Q3 fiscal 2026 results. I'm Kacey Katten, Vice President of Corporate Development and Investor Relations. With me today are Tarang Amin, Chairman and Chief Executive Officer, and Mandy Fields, Senior Vice President and Chief Financial Officer. We encourage you to tune in to our webcast presentation for the best viewing experience, which you can access on our website at investor.elfbeauty.com. Since many of our remarks today contain forward-looking statements, please refer to our earnings release and reports filed with the SEC, where you will find factors that could cause actual results to differ materially from these forward-looking statements. In addition, the company's presentation today includes information presented on a non-GAAP basis. Our earnings release contains reconciliations of the differences between the non-GAAP presentation and the most directly comparable GAAP measure.
KC Katten: Thank you for joining us today to discuss e.l.f. Beauty's Q3 fiscal 2026 results. I'm Kacey Katten, Vice President of Corporate Development and Investor Relations. With me today are Tarang Amin, Chairman and Chief Executive Officer, and Mandy Fields, Senior Vice President and Chief Financial Officer.
Speaker #4: Discuss e.l.f. Beauty's third quarter fiscal '26 results. I'm Casey Katten, Vice President of Corporate Development and Investor Relations. With me today are Tarang Amin, Chairman and Chief Executive Officer, and Mandy Fields, Senior Vice President and Chief Financial Officer.
Speaker #4: We encourage you to tune in to our webcast presentation for the best viewing experience, which you can access on our website at investor.elfbeauty.com. Since many of our remarks today contain forward-looking statements, please refer to our earnings release and reports filed with the SEC, where you'll find factors that could cause actual results to differ materially from these forward-looking statements.
KC Katten: We encourage you to tune in to our webcast presentation for the best viewing experience, which you can access on our website at investor.elfbeauty.com. Since many of our remarks today contain forward-looking statements, please refer to our earnings release and reports filed with the SEC, where you will find factors that could cause actual results to differ materially from these forward-looking statements.
Speaker #4: In addition, the company's presentation today includes information presented on a non-GAAP basis. Our earnings release contains reconciliations of the differences between the non-GAAP presentation and the most directly comparable GAAP measure.
KC Katten: In addition, the company's presentation today includes information presented on a non-GAAP basis. Our earnings release contains reconciliations of the differences between the non-GAAP presentation and the most directly comparable GAAP measure. With that, let me turn the webcast over to Tarang.
Speaker #4: With that, let me turn the webcast over to
Kacey Katten: With that, let me turn the webcast over to Tarang.
Speaker #4: Tarang. Thank you, Casey,
Tarang Amin: Thank you, Kacey, and good afternoon, everyone. Today, we will discuss our Q3 results and our raised outlook for fiscal 2026. I am proud of our incredible e.l.f. Beauty team for another quarter of consistent category-leading growth. In Q3, we grew net sales 38% and adjusted EBITDA 79%. Q3 marked our 28th consecutive quarter of net sales growth, putting e.l.f. Beauty in a rarefied group of high-growth companies. We're one of only six public consumer companies out of 546 that has grown for 28 straight quarters and average at least 20% sales growth per quarter. We're excited by the consumer engagement we're seeing across the beauty category and especially the momentum of our brands. On a consumption basis, our namesake e.l.f. Cosmetics brand grew 8% in the US this quarter, 2 times the category.
Tarang Amin: Thank you, Kacey, and good afternoon, everyone. Today, we will discuss our Q3 results and our raised outlook for fiscal 2026. I am proud of our incredible e.l.f. Beauty team for another quarter of consistent category-leading growth. In Q3, we grew net sales 38% and adjusted EBITDA 79%. Q3 marked our 28th consecutive quarter of net sales growth, putting e.l.f. Beauty in a rarefied group of high-growth companies.
Speaker #5: And good afternoon, everyone. Today, we will discuss our third quarter results and our raised outlook for fiscal 2026. I am proud of our incredible e.l.f. Beauty team for another quarter of consistent, category-leading growth.
Speaker #5: In Q3, we grew net sales 38% and adjusted EBITDA 79%. Q3 marked our 28th consecutive quarter of net sales growth, putting Elf Beauty in a rarefied group of high-growth companies.
Speaker #5: We're one of only six public consumer companies out of 546 that has grown for 28 straight quarters and averaged at least 20% sales growth per quarter.
Tarang Amin: We're one of only six public consumer companies out of 546 that has grown for 28 straight quarters and average at least 20% sales growth per quarter. We're excited by the consumer engagement we're seeing across the beauty category and especially the momentum of our brands. On a consumption basis, our namesake e.l.f. Cosmetics brand grew 8% in the US this quarter, 2 times the category.
Speaker #5: We're excited by the consumer engagement we're seeing across the beauty category, and especially the momentum of our brands. On a consumption basis, our namesake elf cosmetics brand grew 8% in the US this quarter, two times the category.
Speaker #5: We increased our market share by 130 basis points, the largest share gain among over 700 cosmetics brands tracked by Nielsen. Elf skin consumption grew 16% in the US this quarter.
Tarang Amin: We increased our market share by 130 basis points, the largest share gain among over 700 cosmetics brands tracked by Nielsen. e.l.f. SKIN consumption grew 16% in the US this quarter, also outperforming the category 2 times. Naturium, our clinically effective, biocompatible skincare brand, which we acquired 2 years ago, continues to drive strong growth. rhode, the high-growth beauty brand founded by Hailey Bieber, which was acquired in August, delivered an outstanding quarter, achieving the number one brand ranking in Sephora, North America, and executing another record-breaking launch with Sephora in the UK. The strength of our brands is evident when viewed in the context of the overall beauty market. While beauty has comparatively low barriers of entry, very few brands have been able to scale.
Tarang Amin: We increased our market share by 130 basis points, the largest share gain among over 700 cosmetics brands tracked by Nielsen. e.l.f. SKIN consumption grew 16% in the US this quarter, also outperforming the category 2 times. Naturium, our clinically effective, biocompatible skincare brand, which we acquired 2 years ago, continues to drive strong growth.
Speaker #5: Also outperforming the category two times. Naturium, our clinically effective, biocompatible skincare brand which we acquired two years ago, continues to drive strong growth. Rhode, the high-growth beauty brand founded by Hailey Bieber, which was acquired in August, delivered an outstanding quarter, achieving the number one brand ranking in Sephora North America and executing another record-breaking launch with Sephora in the UK.
Tarang Amin: rhode, the high-growth beauty brand founded by Hailey Bieber, which was acquired in August, delivered an outstanding quarter, achieving the number one brand ranking in Sephora, North America, and executing another record-breaking launch with Sephora in the UK. The strength of our brands is evident when viewed in the context of the overall beauty market. While beauty has comparatively low barriers of entry, very few brands have been able to scale.
Speaker #5: The strength of our brands is evident when viewed in the context of the overall beauty market. While beauty has comparatively low barriers to entry, very few brands have been able to scale.
Speaker #5: Of the nearly 1,800 cosmetics and skincare brands tracked by Nielsen, only 14 have surpassed $200 million in annual retail sales. We have four of these 14 brands.
Tarang Amin: Of the nearly 1,800 cosmetics and skincare brands tracked by Nielsen, only 14 have surpassed $200 million in annual retail sales. We have 4 of these 14 brands. The combination of our value proposition, powerhouse innovation, and disruptive marketing engine continue to fuel our results and our outperformance relative to the category. Let me take a moment to discuss a few of the milestones we achieved in Q3. Starting with our value proposition, we believe in democratizing access to the best of beauty. Each of our brands offers accessible price points relative to the competitive set. For context, the average price for e.l.f. Cosmetics is $7.50 today, as compared to approximately $9.50 for legacy mass cosmetics brands and nearly $30 for prestige brands.
Tarang Amin: Of the nearly 1,800 cosmetics and skincare brands tracked by Nielsen, only 14 have surpassed $200 million in annual retail sales. We have 4 of these 14 brands. The combination of our value proposition, powerhouse innovation, and disruptive marketing engine continue to fuel our results and our outperformance relative to the category. Let me take a moment to discuss a few of the milestones we achieved in Q3.
Speaker #5: The combination of our value proposition, powerhouse innovation, and disruptive marketing engine continues to fuel our results and our outperformance relative to the category. Let me take a moment to discuss a few of the milestones we achieved in Q3.
Speaker #5: Starting with our value proposition, we believe in democratizing access to the best of beauty. Each of our brands offers accessible price points relative to the competitive set.
Tarang Amin: Starting with our value proposition, we believe in democratizing access to the best of beauty. Each of our brands offers accessible price points relative to the competitive set. For context, the average price for e.l.f. Cosmetics is $7.50 today, as compared to approximately $9.50 for legacy mass cosmetics brands and nearly $30 for prestige brands.
Speaker #5: For context, the average price for e.l.f. Cosmetics is $7.50 today, as compared to approximately $9.50 for legacy mass cosmetics brands, and nearly $30 for prestige brands.
Speaker #5: 75% of elf's brand product portfolio sits at a phenomenal value of $10 or less. While there are other brands with low price points, our real advantage is our ability to also deliver exceptional quality.
Tarang Amin: 75% of e.l.f.'s brand product portfolio sits at a phenomenal value of $10 or less. While there are other brands with low price points, our real advantage is our ability to also deliver exceptional quality. Our quality scores have gone up every year over the past 10 years. Consumers love e.l.f. for delivering an incredible price point and quality that is often better than prestige. Looking to innovation, we have a unique community-led approach to innovation across our brands, focused on democratizing access to the best of beauty through our premium quality products at extraordinary prices. Our namesake, e.l.f. brand, held 4 of the top 10 new products in all of mass cosmetics in 2025, on top of holding 6 of the top 10 new products in 2024. The consistency of our winning innovation is supporting our share gains across segments.
Tarang Amin: 75% of e.l.f.'s brand product portfolio sits at a phenomenal value of $10 or less. While there are other brands with low price points, our real advantage is our ability to also deliver exceptional quality. Our quality scores have gone up every year over the past 10 years. Consumers love e.l.f. for delivering an incredible price point and quality that is often better than prestige.
Speaker #5: Our quality scores have gone up every year over the past 10 years. Consumers love elf for delivering an incredible price point and quality that is often better than prestige.
Speaker #5: Looking to innovation, we have a unique community-led approach to innovation across our brands, focused on democratizing access to the best of beauty through our premium prices.
Tarang Amin: Looking to innovation, we have a unique community-led approach to innovation across our brands, focused on democratizing access to the best of beauty through our premium quality products at extraordinary prices. Our namesake, e.l.f. brand, held 4 of the top 10 new products in all of mass cosmetics in 2025, on top of holding 6 of the top 10 new products in 2024. The consistency of our winning innovation is supporting our share gains across segments.
Speaker #5: Our namesake quality products at extraordinary elf brand held four of the top 10 new products in all of mass cosmetics in 2025, on top of holding six of the top 10 new products in 2024.
Speaker #5: The consistency of our winning innovation is supporting our share gains across segments. We've more than doubled e.l.f. Cosmetics' market share over the last five years, and see significant opportunity ahead.
Tarang Amin: We've more than doubled e.l.f. Cosmetics market share over the last five years and see significant opportunity ahead. As compared to the 22% share we have in face makeup, we have a 13% share in lip and a 9% share in eye. We have significant white space in these large segments and believe we have the innovation engine to conquest them. Spring 2026 is an exciting time for innovation. Building on the success of e.l.f.'s Glow Reviver Lip Oil in 2024 and Melting Lip Balm in 2025, we recently launched our Glow Reviver Slipstick at a $10 price point compared to a prestige item at $48.
Tarang Amin: We've more than doubled e.l.f. Cosmetics market share over the last five years and see significant opportunity ahead. As compared to the 22% share we have in face makeup, we have a 13% share in lip and a 9% share in eye. We have significant white space in these large segments and believe we have the innovation engine to conquest them.
Speaker #5: As compared to the 22% share we have in face makeup, we have a 13% share in lip and a 9% share in eye. We have significant white space in these large segments, and believe we have the innovation engine to conquest them.
Speaker #5: Spring 2026 is an exciting time for innovation. Building on the success of e.l.f.'s Glow Reviver Lip Oil in 2024 and Melting Lip Balm in 2025, we recently launched our Glow Reviver Slipstick at a $10 price point, compared to a prestige item at $48.
Tarang Amin: Spring 2026 is an exciting time for innovation. Building on the success of e.l.f.'s Glow Reviver Lip Oil in 2024 and Melting Lip Balm in 2025, we recently launched our Glow Reviver Slipstick at a $10 price point compared to a prestige item at $48.
[Company Representative] (e.l.f. Beauty): This is what I'm talking about, e.l.f. Immediately, yes! This one is called Love Slick. Go ahead. Oh, oh, oh! This is giving luxury without the $45 price tag, okay?
[Video Narrator]: This is what I'm talking about, e.l.f. Immediately, yes! This one is called Love Slick. Go ahead. Oh, oh, oh! This is giving luxury without the $45 price tag, okay?
Speaker #6: This is what I'm talking about. Immediately, yes. This one is called Love Slick. Go ahead. Oh, oh, oh. This is giving luxury without the $45 price tag.
Speaker #6: Okay?
Speaker #5: We're pleased with the initial reaction we're seeing from our community. With slipstick already achieving the number one new lipstick on both Amazon and TikTok Shop, where it debuted.
Tarang Amin: We're pleased with the initial reaction we're seeing from our community. With Slipstick already achieving the number one new lipstick on both Amazon and TikTok Shop where it debuted. We're also excited about e.l.f. Soft Glam Satin Concealer, our first concealer innovation in the last five years. At an incredible $5 price point compared to the prestige item at $32, we're answering our community's call for value.
Tarang Amin: We're pleased with the initial reaction we're seeing from our community. With Slipstick already achieving the number one new lipstick on both Amazon and TikTok Shop where it debuted. We're also excited about e.l.f. Soft Glam Satin Concealer, our first concealer innovation in the last five years. At an incredible $5 price point compared to the prestige item at $32, we're answering our community's call for value.
Speaker #5: We're also excited about elf's soft glam satin concealer, our first concealer innovation in the last five years. At an incredible $5 price point compared to the prestige item at $32, we're answering our community's call for value.
[Company Representative] (e.l.f. Beauty): e.l.f., what is this? e.l.f. took one of my favorite foundations, Soft Glam, which I talk about all the time, and they put it into a concealer. Are you kidding me? When I tell you, I did not expect this at all. Love the packaging. It's the new e.l.f. Soft Glam Satin Medium Buildable Coverage Concealer. It's made with hyaluronic acid. It's supposed to be hydrating. A first impression of the formula, it is on the thicker side, which I didn't expect, but it is stunning. Do you see that? Love how easily that melted into my skin. Look at it. That is absolutely beautiful. Oh, my gosh!
[Video Narrator]: e.l.f., what is this? e.l.f. took one of my favorite foundations, Soft Glam, which I talk about all the time, and they put it into a concealer. Are you kidding me? When I tell you, I did not expect this at all. Love the packaging. It's the new e.l.f. Soft Glam Satin Medium Buildable Coverage Concealer. It's made with hyaluronic acid. It's supposed to be hydrating. A first impression of the formula, it is on the thicker side, which I didn't expect, but it is stunning.
Speaker #6: Elf, what is this? Elf took one of my favorite foundations, Soft Glam, which I talk about all the time, and they put it into a concealer?
Speaker #6: Are you kidding me? When I tell you I did not expect this at all. Love the packaging. It's the new e.l.f. Soft Glam Satin Medium Buildable Coverage Concealer.
Speaker #6: It's made with hyaluronic acid. It's supposed to be hydrating. Okay, first impression of the formula: it is on the thicker side, which I didn't expect.
Speaker #6: But it is stunning. Do you see that? Love how easily that melts into my skin. Look at it. That is absolutely beautiful. Oh.
[Video Narrator]: Do you see that? Love how easily that melted into my skin. Look at it. That is absolutely beautiful. Oh, my gosh! I'm going to keep it short and simple. This is what $5 under eyes look like. This is a $5 drugstore concealer, which is giving literally flawless under eyes.
Speaker #6: my gosh. I'm going to keep it short
[Company Representative] (e.l.f. Beauty): I'm going to keep it short and simple. This is what $5 under eyes look like. This is a $5 drugstore concealer, which is giving literally flawless under eyes.
Speaker #7: And simple. This is what $5 under eyes look like. This is a $5 drugstore concealer which is giving literally flawless under eyes.
Speaker #5: You can expect to see our spring innovation rolling out with our global retail partners over the coming weeks. We're leaning into our disruptive marketing engine to fuel brand awareness across our portfolio and deepen the connection we have with our community.
Tarang Amin: You can expect to see our spring innovation rolling out with our global retail partners over the coming weeks. We're leaning into our disruptive marketing engine to fuel brand awareness across our portfolio and deepen the connection we have with our community. We're also reaching new audiences through our unique brand-on-brand partnerships with like-minded disruptors. Two years ago, e.l.f. Cosmetics partnered with Liquid Death, one of the fastest growing beverage brands, for a limited edition Corpse Paint collection that sold out in 45 minutes. Our community was thirsty for more, so we reunited with Liquid Death to launch a sequel.
Tarang Amin: You can expect to see our spring innovation rolling out with our global retail partners over the coming weeks. We're leaning into our disruptive marketing engine to fuel brand awareness across our portfolio and deepen the connection we have with our community. We're also reaching new audiences through our unique brand-on-brand partnerships with like-minded disruptors.
Speaker #5: We're also reaching new audiences through our unique brand-on-brand partnerships with like-minded disruptors. Two years ago, e.l.f. Cosmetics partnered with Liquid Death, one of the fastest growing beverage brands, for a limited-edition corpse paint collection that sold out in 45 minutes.
Tarang Amin: Two years ago, e.l.f. Cosmetics partnered with Liquid Death, one of the fastest growing beverage brands, for a limited edition Corpse Paint collection that sold out in 45 minutes. Our community was thirsty for more, so we reunited with Liquid Death to launch a sequel.
Speaker #5: Our community was thirsty for more, so we reunited with Liquid Death to launch a sequel
[Company Representative] (e.l.f. Beauty): How do I look for my big first date? So dead, but your lips look like they're dying.
[Video Narrator]: How do I look for my big first date? So dead, but your lips look like they're dying.
Speaker #8: Look for my big first. How do I
Speaker #8: Date? So dead. But your lips look like they're dying.
[Company Representative] (e.l.f. Beauty): Dad! Mr. Gloothar.
[Video Narrator]: Dad! Mr. Gloothar.
Speaker #9: Dead. Someone say dying.
[Company Representative] (e.l.f. Beauty): Here, try this new Lip Embalm from Liquid Death at e.l.f.
[Video Narrator]: Here, try this new Lip Embalm from Liquid Death at e.l.f.
Speaker #10: Here, try this
Speaker #10: new lip and balm from Liquid Death at Mr. Glow Bar.
Speaker #10: Elf.
Speaker #9: Lip and balm? What's
Speaker #9: that?
[Company Representative] (e.l.f. Beauty): ... Well, liveliness, use Lip Embalm. If you don't use it, your lips will be gone. Hydrating your lips is a necessity, or else they'll crack and fall off like you've got leprosy. So then your smile peels back and exposes your gums, and that's the worst part till the next part comes. 'Cause the dryness of your lips spread all over your face, and your eyes pop out like a couple of grapes. If you don't use Lip Embalm, your flesh and blood will all be gone, and your skin will be all shriveled up and fall right off your face. Now, your eyes are gaping and your skull's exposed, and you're not gonna love what's left of your nose. Now, your blood and guts and hope are gone, 'cause you should have reached for one of the six delicious flavors of Lip Embalm.
[Video Narrator]: ... Well, liveliness, use Lip Embalm. If you don't use it, your lips will be gone. Hydrating your lips is a necessity, or else they'll crack and fall off like you've got leprosy. So then your smile peels back and exposes your gums, and that's the worst part till the next part comes. 'Cause the dryness of your lips spread all over your face, and your eyes pop out like a couple of grapes. If you don't use Lip Embalm, your flesh and blood will all be gone, and your skin will be all shriveled up and fall right off your face. Now, your eyes are gaping and your skull's exposed, and you're not gonna love what's left of your nose. Now, your blood and guts and hope are gone, 'cause you should have reached for one of the six delicious flavors of Lip Embalm.
Speaker #11: Well, I've made lips use lip and balm. If you don't use it, your lips will be gone. Hydrating your lips is a necessity. Your e.l.f. will crack and fall off like you've got
Speaker #11: leprosy. So then your smile feels back and
Speaker #12: exposes your gums. And that's the worst part till the next part comes. 'Cause the dryness of your lips spread all over your face. And your eyes
Speaker #12: exposes your gums. And that's the worst part till the next part comes. 'Cause the dryness of your lips spread all over your face. And your eyes pop out like a couple of grapes.
Speaker #11: If you don't use lip and balm, your flesh and blood will all be gone. Then your skin will be all shriveled up and fall right off your face.
Speaker #11: Now your eyes are gaping and your skull's exposed. And you're not going to love what's left of your nose. Now your blood and guts and hope are gone.
Speaker #11: ’Cause you should have reached for one of the six delicious flavors of Lip & Balm. If you don’t use Lip & Balm, then you’ll just be a pile of pork chop flesh.
[Company Representative] (e.l.f. Beauty): If you don't use Lip Embalm, then you'll just be a pile of dried flesh, and your skin will fall right off your eyes and bring death.
[Video Narrator]: If you don't use Lip Embalm, then you'll just be a pile of dried flesh, and your skin will fall right off your eyes and bring death.
Speaker #11: And your skin will fall right off your eyes and lips are
Speaker #11: done.
[Company Representative] (e.l.f. Beauty): Oh, that must be my date! Thanks for the Lip Embalm, Dad.
[Video Narrator]: Oh, that must be my date! Thanks for the Lip Embalm, Dad.
Speaker #8: Oh, that must
Speaker #8: ust be my date. Thanks for the
Speaker #8: lip and balm, Dad. You look beautiful, Honey, right in
[Company Representative] (e.l.f. Beauty): You look beautiful, dear.
[Video Narrator]: You look beautiful, dear.
Speaker #10: dear.
[Company Representative] (e.l.f. Beauty): Honey, Brayden's here, and his mom.
[Video Narrator]: Honey, Brayden's here, and his mom.
[Company Representative] (e.l.f. Beauty): Lip Embalm comes in six of your favorite thirst-murdering Liquid Death flavors. Get yours at elfcosmetics.com/lipembalm.
[Video Narrator]: Lip Embalm comes in six of your favorite thirst-murdering Liquid Death flavors. Get yours at elfcosmetics.com/lipembalm.
Speaker #8: Lip and Balm comes in six of your favorite thirst-murdering Liquid Death flavors. Get yours at elfcosmetics.com/slash
Speaker #8: lip and balm. The response from our community to
Tarang Amin: The response from our community to this limited edition Lip Embalms was phenomenal. Our Lip Crypt Vault sold out in 19 minutes. Our campaign drove over 4 billion earned impressions, and our Date with Death stunt generated over 10 million views. We also saw over 25 million attempts at completing the Liquid Death obstacle course and our e.l.f. UP! Roblox experience, with an average playtime of over 17 minutes per session. In another first-of-its-kind collaboration, e.l.f. recently joined forces with H&M to reimagine three e.l.f. Beauty icons as irresistible fragrances. The collaboration marks a number of firsts: e.l.f.'s first global collaboration, dropping in 27 countries. e.l.f.'s first fragrance launch, a category our community has been asking for. As well as H&M's first partnership with another beauty brand.
Tarang Amin: The response from our community to this limited edition Lip Embalms was phenomenal. Our Lip Crypt Vault sold out in 19 minutes. Our campaign drove over 4 billion earned impressions, and our Date with Death stunt generated over 10 million views.
Speaker #5: This limited edition lip and balms was phenomenal. Our Lip Crepe Vault sold out in 19 minutes. Our campaign drove over 4 billion earned impressions.
Speaker #5: And our Date with Death stunt generated over 10 million views. We also saw over 25 million attempts at completing the Liquid Death obstacle course in our e.l.f. Up Roblox experience.
Tarang Amin: We also saw over 25 million attempts at completing the Liquid Death obstacle course and our e.l.f. UP! Roblox experience, with an average playtime of over 17 minutes per session. In another first-of-its-kind collaboration, e.l.f. recently joined forces with H&M to reimagine three e.l.f. Beauty icons as irresistible fragrances. The collaboration marks a number of firsts: e.l.f.'s first global collaboration, dropping in 27 countries. e.l.f.'s first fragrance launch, a category our community has been asking for.
Speaker #5: With an average playtime of over 17 minutes per session. In another first-of-its-kind collaboration, e.l.f. recently joined forces with H&M to reimagine three e.l.f. beauty icons as irresistible fragrances.
Speaker #5: The collaboration marks a number of firsts: e.l.f.'s first global collaboration, dropping in 27 countries; e.l.f.'s first fragrance launch, a category our community has been asking for.
Speaker #5: As well as H&M's first partnership with another beauty brand. The collection launches for a limited time only starting January 29, with a robust activation plan, including outreach to H&M's 150 million loyalty members.
Speaker #5: As well as H&M's first partnership with another beauty brand. The collection launches for a limited time only starting January 29, with a robust activation plan, including outreach to H&M's 150 million loyalty members globally.
Tarang Amin: As well as H&M's first partnership with another beauty brand. The collection launches for a limited time only, starting 29 January, with a robust activation plan, including outreach to H&M's 150 million loyalty members globally.
Tarang Amin: The collection launches for a limited time only, starting 29 January, with a robust activation plan, including outreach to H&M's 150 million loyalty members globally.
[Company Representative] (e.l.f. Beauty): Spritz, walk, walk, pose. Eyes, lips, face, nose. Spritz, walk, walk, pose. H&M, e.l.f.'s the tone. Flip it, flick it all around, my Power Grip won't let me down. Flip it, walk it, you can lip. Take it back and watch me rip. Slap it, flip it, watch me shine. Feel electric, smell divine. Floral, flawless, vanilla sweet. Peace out with Jesus can be beat. First you see me, now you don't. Wear my scent like an overcoat. Pretty goodie, shake it fair. Camel covered all over there. Loosen up, express your e.l.f. Feel the vibe while I feel myself. Spritz, flow, camel, spritz. This gorgeous game, too good to miss. Spritz, walk, walk, pose. Eyes, lips, face, nose. Spritz, walk, walk, pose. H&M, e.l.f.'s the tone.
[Video Narrator]: Spritz, walk, walk, pose. Eyes, lips, face, nose. Spritz, walk, walk, pose. H&M, e.l.f.'s the tone. Flip it, flick it all around, my Power Grip won't let me down. Flip it, walk it, you can lip. Take it back and watch me rip. Slap it, flip it, watch me shine. Feel electric, smell divine. Floral, flawless, vanilla sweet. Peace out with Jesus can be beat.
Speaker #11: Baby, walk off cold eyes. Lipsticks, no spritz. Walk off
Speaker #11: Cold. H&M, e.l.f. the toe. Lip that's naked all around my Power Grip. Won't let me down. Spit it, walk it. You can lip shake it back.
Speaker #11: and watch me drip. Love that stupid, Feel electric,
Speaker #11: smell divine.
Speaker #8: Flawless, flawless, vanilla sweet. Teeth that we teach just can't watch me shine. Be beat.
[Video Narrator]: First you see me, now you don't. Wear my scent like an overcoat. Pretty goodie, shake it fair. Camel covered all over there. Loosen up, express your e.l.f. Feel the vibe while I feel myself. Spritz, flow, camel, spritz. This gorgeous game, too good to miss. Spritz, walk, walk, pose. Eyes, lips, face, nose. Spritz, walk, walk, pose. H&M, e.l.f.'s the tone.
Speaker #11: But she see me now, you don't. Wear my scent like an overcoat.
Speaker #8: Booty, gooty, shake it, babe. Camo covered all over there. Feel
Speaker #11: Loosen up, express your elf.
Speaker #8: the vibe while I feel myself.
Speaker #11: Grip, flow, camo, spritz. This gorgeous
Speaker #11: gang too good to miss. Spritz, Eyes, lip
Speaker #8: walk off cold.
Speaker #8: Spritz, walk face, nose.
Speaker #8: Spritz, walk face, nose. off cold. H&M, elf
Speaker #11: the
Speaker #11: toe. The excitement
Tarang Amin: The excitement on our marketing calendar doesn't just stop there. Make sure you tune in to Peacock this Sunday, where e.l.f. will be debuting a commercial at the big game. While the big game serves as our ignition point, we plan to run our commercial for an additional 8 weeks across a variety of platforms, with a total estimated campaign reach of nearly 300 million.
Tarang Amin: The excitement on our marketing calendar doesn't just stop there. Make sure you tune in to Peacock this Sunday, where e.l.f. will be debuting a commercial at the big game. While the big game serves as our ignition point, we plan to run our commercial for an additional 8 weeks across a variety of platforms, with a total estimated campaign reach of nearly 300 million.
Speaker #5: On our marketing calendar, it doesn't just stop there. Make sure you tune in to Peacock this Sunday, where e.l.f. will be debuting a commercial at the big game.
Speaker #5: While the big game serves as our ignition point, we plan to run our commercial for an additional eight weeks across a variety of platforms, with a total estimated campaign reach of nearly 300.
Speaker #5: million. Elf presenta,
[Company Representative] (e.l.f. Beauty): e.l.f. presents, Melissa. Get ready for the world's biggest reggaeton show.
[Video Narrator]: e.l.f. presents, Melissa. Get ready for the world's biggest reggaeton show.
Speaker #13: Melissa. Get ready for
Speaker #14: the world's biggest reggaeton
Speaker #14: show. Check, I don't speak
[Company Representative] (e.l.f. Beauty): But I don't speak Spanish. Help! Doctor, what day is it?
[Video Narrator]: But I don't speak Spanish. Help! Doctor, what day is it?
Speaker #15: Spanish. Doctor, what
Speaker #15: Day is it? Melissa, the big show is
[Company Representative] (e.l.f. Beauty): Melissa, the big show is tonight. It's in Spanish. How is your español?
[Video Narrator]: Melissa, the big show is tonight. It's in Spanish. How is your español?
Speaker #16: Tonight. It's in Spanish. How is your español?
[Company Representative] (e.l.f. Beauty): Adiós, soy un baño. Soy un baño.
[Video Narrator]: Adiós, soy un baño. Soy un baño.
Speaker #15: Adiós, soy un baño. Soy un baño.
Speaker #16: We have a lot of work to do. We need juicy lips so you can own those arms.
[Company Representative] (e.l.f. Beauty): We have a lot of work to do. You need juicy lips so you can roll those Rs.
[Video Narrator]: We have a lot of work to do. You need juicy lips so you can roll those Rs.
[Company Representative] (e.l.f. Beauty): El soy un baño punto com.
[Video Narrator]: El soy un baño punto com.
Speaker #13: En Soy un baño.com.
[Company Representative] (e.l.f. Beauty): Ah!
[Video Narrator]: Ah!
Tarang Amin: The strength of our category-leading results and productivity continues to earn our brand space with our global retailers. The e.l.f. brand remains the most productive cosmetics brand on a dollar per linear foot basis with our largest retail customers globally. We're looking forward to the expansion we have planned for e.l.f. in spring 2026, expanding our space with an Ulta Beauty in the US and launching with dm in Germany. We're leaning on the strength of our retail relationships to enhance the global distribution footprint for our brands. In September, rhode launched in retail for the first time with Sephora, the world's leading global beauty retailer, achieving the biggest launch in Sephora North America history, 2.5 times bigger than any other brand. In November, rhode achieved another record-breaking launch as it expanded with Sephora in the UK.
Tarang Amin: The strength of our category-leading results and productivity continues to earn our brand space with our global retailers. The e.l.f. brand remains the most productive cosmetics brand on a dollar per linear foot basis with our largest retail customers globally. We're looking forward to the expansion we have planned for e.l.f. in spring 2026, expanding our space with an Ulta Beauty in the US and launching with dm in Germany.
Speaker #5: The strength of our category-leading results and productivity continues to earn our brand space with our global retailers. The elf brand remains the most productive cosmetics brand on a dollar per linear foot basis with our largest retail customers globally.
Speaker #5: We're looking forward to the expansion we have planned for elf in spring 2026. Expanding our space with an ultra beauty in the US and launching with DM in Germany.
Tarang Amin: We're leaning on the strength of our retail relationships to enhance the global distribution footprint for our brands. In September, rhode launched in retail for the first time with Sephora, the world's leading global beauty retailer, achieving the biggest launch in Sephora North America history, 2.5 times bigger than any other brand. In November, rhode achieved another record-breaking launch as it expanded with Sephora in the UK.
Speaker #5: We're leaning on the strength of our retail relationships to enhance the global distribution footprint for our brands. In September, Road launched in retail for the first time with Sephora, the world's leading global beauty retailer.
Speaker #5: Achieving the biggest launch in Sephora North America history, two and a half times bigger than any other brand. In November, road achieved another record-breaking launch as it expanded with Sephora in the UK.
Speaker #5: This was UK history, outperforming the previous record holder by five times. In terms of the largest launch in Sephora launch road in Australia and New Zealand with Mecca this month to further its global reach.
Tarang Amin: This was the largest launch in Sephora UK history, outperforming the previous record holder by 5 times. In terms of what's next, we're excited to launch rhode in Australia and New Zealand with MECCA this month to further its global reach. We're seeing significant pent-up global appetite for rhode. International drives approximately 20% of rhode's DTC sales, while 74% of the brand's social followers are from outside the US. Turning to Naturium, when we acquired the brand two years ago, it was only available on Target, Amazon, Space NK, and its own website. Since then, we've launched Naturium with Ulta Beauty in the US, Shoppers Drug Mart in Canada, Boots in the UK, and Sephora in Australia and New Zealand. We're pleased by the strong growth in share gains we're seeing across retailers.
Tarang Amin: This was the largest launch in Sephora UK history, outperforming the previous record holder by 5 times. In terms of what's next, we're excited to launch rhode in Australia and New Zealand with MECCA this month to further its global reach. We're seeing significant pent-up global appetite for rhode. International drives approximately 20% of rhode's DTC sales, while 74% of the brand's social followers are from outside the US.
Speaker #5: global appetite for road. International drives approximately 20% of road's DTC sales. While 74% of the brand's social followers are from outside the US. Turning to Naturium, when we acquired the brand two years ago, it was only available on Target, Amazon, SpaceNK, and its own website.
Tarang Amin: Turning to Naturium, when we acquired the brand two years ago, it was only available on Target, Amazon, Space NK, and its own website. Since then, we've launched Naturium with Ulta Beauty in the US, Shoppers Drug Mart in Canada, Boots in the UK, and Sephora in Australia and New Zealand. We're pleased by the strong growth in share gains we're seeing across retailers.
Speaker #5: Since then, we've launched Naturium with ultra beauty in the US, shoppers' drug mart in Canada, boots in the UK, and Sephora in Australia and New Zealand.
Speaker #5: We're pleased by the strong growth in share gains we're seeing across retailers. We'll be expanding Naturium's retail presence to Walmart for the first time this spring, where the brand will be launching in a subset of US stores.
Tarang Amin: We'll be expanding Naturium's retail presence to Walmart for the first time this spring, where the brand will be launching in a subset of US stores. With this launch, we're continuing to further Naturium's unwavering commitment to deliver the science of consistent skincare to everyone, everywhere, every day. Looking across our brand portfolio, we're in the early days of our international opportunity we see. For context, international drives approximately 20% of our net sales, as compared to legacy peers having over 70% of their sales outside the US. In summary, we're excited by the broad-based momentum we're seeing across our brand portfolio and remain confident in our ability to continue to gain share and deliver best-in-class growth in beauty. I'll now turn the call over to Mandy to talk more about our Q3 results and our raised outlook for fiscal 2026.
Tarang Amin: We'll be expanding Naturium's retail presence to Walmart for the first time this spring, where the brand will be launching in a subset of US stores. With this launch, we're continuing to further Naturium's unwavering commitment to deliver the science of consistent skincare to everyone, everywhere, every day. Looking across our brand portfolio, we're in the early days of our international opportunity we see.
Speaker #5: With this launch, we're continuing to further Naturium's unwavering commitment to deliver the science of consistent everywhere, every day. Looking across our brand portfolio, we're in the early days of our international opportunity we see.
Speaker #5: For context, International drives approximately 20% of our net sales, as compared to legacy peers having over 70% of their sales outside the U.S. In summary, we're excited by the broad-based momentum we're seeing across our brand portfolio and remain confident in our ability to continue to gain share and deliver best-in-class growth in beauty.
Tarang Amin: For context, international drives approximately 20% of our net sales, as compared to legacy peers having over 70% of their sales outside the US. In summary, we're excited by the broad-based momentum we're seeing across our brand portfolio and remain confident in our ability to continue to gain share and deliver best-in-class growth in beauty. I'll now turn the call over to Mandy to talk more about our Q3 results and our raised outlook for fiscal 2026.
Speaker #5: I'll now turn the call over to Mandy to talk more about our third-quarter results and our raised outlook for fiscal '26.
Speaker #17: Thank you, Terang. Q3 net sales grew 38% year over year, on top of 31% growth in Q3 of last year. The acquisition of road contributed 128 million dollars, or approximately 36 percentage points, to our Q3 net sales growth.
Mandy Fields: Thank you, Tarang. Q3 net sales grew 38% year-over-year, on top of 31% growth in Q3 of last year. The acquisition of rhode contributed $128 million, or approximately 36 percentage points, to our Q3 net sales growth. This better-than-expected performance was supported by strong retail sell-throughs in Sephora North America, a record-breaking launch in Sephora UK, and a strong holiday period on rhodeskin.com. Looking to our organic sales trends, excluding rhode, our Q3 net sales were up approximately 2% year-over-year. This was lower than anticipated, given some softer trends we've seen in the UK and Germany, our largest international markets. As we've talked before, we're seeing weaker consumption in the UK and we're cycling our largest international launch to date with Rossmann, Germany. Outside of those markets, international consumption remains strong.
Mandy Fields: Thank you, Tarang. Q3 net sales grew 38% year-over-year, on top of 31% growth in Q3 of last year. The acquisition of rhode contributed $128 million, or approximately 36 percentage points, to our Q3 net sales growth. This better-than-expected performance was supported by strong retail sell-throughs in Sephora North America, a record-breaking launch in Sephora UK, and a strong holiday period on rhodeskin.com.
Speaker #17: This better-than-expected performance was supported by strong retail sell-throughs in Sephora North America, a record-breaking launch in Sephora UK, and a strong holiday period on roadskin.com. Looking to our organic sales trends, excluding Road, our Q3 net sales were up approximately 2% year over year.
Mandy Fields: Looking to our organic sales trends, excluding rhode, our Q3 net sales were up approximately 2% year-over-year. This was lower than anticipated, given some softer trends we've seen in the UK and Germany, our largest international markets. As we've talked before, we're seeing weaker consumption in the UK and we're cycling our largest international launch to date with Rossmann, Germany. Outside of those markets, international consumption remains strong.
Speaker #17: This was lower than anticipated, given some softer trends we've seen in the UK and Germany—our largest international markets. As we've talked before, we're seeing weaker consumption in the UK, and we're cycling our largest international launch to date with Rossmann Germany.
Speaker #17: Outside of those markets, international consumption remains strong. Looking to our geographic regions, our net sales in the U.S. grew 36% year over year, while in Q3, international net sales grew 44%.
Mandy Fields: Looking to our geographic regions, our net sales in the US grew 36% year-over-year, while in Q3, international net sales grew 44%. Pricing and product mix added approximately 38 points to net sales growth, while unit volumes were relatively flat year-over-year. Q3 gross margin of 71% was down approximately 30 basis points compared to prior year and up 200 basis points sequentially versus Q2, in line with our expectations. The year-over-year decrease was largely driven by tariffs, partially offset by pricing and mix. On an adjusted basis, SG&A, as a percentage of sales, was 51% in Q3, as compared to 54% in Q3 last year.
Mandy Fields: Looking to our geographic regions, our net sales in the US grew 36% year-over-year, while in Q3, international net sales grew 44%. Pricing and product mix added approximately 38 points to net sales growth, while unit volumes were relatively flat year-over-year.
Speaker #17: Pricing and product mix added approximately 38 points to net sales growth, while unit volumes were relatively flat year over year. Q3 gross margin of 71% was down approximately 30 basis points compared to prior year, and up 200 basis points sequentially versus Q2.
Mandy Fields: Q3 gross margin of 71% was down approximately 30 basis points compared to prior year and up 200 basis points sequentially versus Q2, in line with our expectations. The year-over-year decrease was largely driven by tariffs, partially offset by pricing and mix. On an adjusted basis, SG&A, as a percentage of sales, was 51% in Q3, as compared to 54% in Q3 last year.
Speaker #17: In line with our expectations. The year-over-year decrease was largely driven by tariffs, partially offset by pricing and mix. On an adjusted basis, SG&A as a percentage of sales was 51% in Q3, as compared to 54% in Q3 last year.
Speaker #17: While we continue to make ongoing investments in our team and infrastructure, this was offset by leverage in our marketing spend on a year-over-year basis, and a timing shift of some of our SG&A expenses into the fourth quarter.
Mandy Fields: While we continue to make ongoing investments in our team and infrastructure, this was offset by leverage in our marketing spend on a year-over-year basis and a timing shift of some of our SG&A expenses into the fourth quarter. Marketing and digital investment for the quarter was 21% of net sales, as compared to 27% in Q3 last year. Q3 Adjusted EBITDA was $123 million, up 79% versus last year. Adjusted net income was $74 million, or $1.24 per diluted share, compared to $43 million, or $0.74 per diluted share a year ago. Moving to the balance sheet and cash flow. Our balance sheet remains strong, and we believe positions us well to execute our long-term growth plans.
Mandy Fields: While we continue to make ongoing investments in our team and infrastructure, this was offset by leverage in our marketing spend on a year-over-year basis and a timing shift of some of our SG&A expenses into the fourth quarter. Marketing and digital investment for the quarter was 21% of net sales, as compared to 27% in Q3 last year. Q3 Adjusted EBITDA was $123 million, up 79% versus last year.
Speaker #17: Marketing and digital investment for the quarter was 21% of net sales, as compared to 27% in Q3 last year. Q3 adjusted EBITDA was $123 million, up 79% versus last year.
Speaker #17: Adjusted net income was $74 million, or $1.24 per diluted share, compared to $43 million, or $0.74 per diluted share a year ago.
Mandy Fields: Adjusted net income was $74 million, or $1.24 per diluted share, compared to $43 million, or $0.74 per diluted share a year ago. Moving to the balance sheet and cash flow. Our balance sheet remains strong, and we believe positions us well to execute our long-term growth plans.
Speaker #17: Moving to the balance sheet and cash flow. Our balance sheet remained strong, and we believe it positions us well to execute our long-term growth plans.
Speaker #17: We ended the quarter with $197 million in cash on hand, compared to a cash balance of $74 million a year ago. During the quarter, we repurchased approximately $50 million of our outstanding common stock, given the disconnect we see between e.l.f. Beauty's market valuation and the strength of our business fundamentals.
Mandy Fields: We ended the quarter with $197 million in cash on hand, compared to a cash balance of $74 million a year ago. During the quarter, we repurchased approximately $50 million of our outstanding common stock, given the disconnect we see between e.l.f. Beauty's market valuation and the strength of our business fundamentals. At quarter end, approximately $400 million remained available for repurchase under our previously authorized repurchase program. Our liquidity position remains strong, with less than 2x net debt to Adjusted EBITDA, even after our acquisition of rhode. We expect our cash priorities for the year to remain on investing behind our growth initiatives and supporting strategic extensions. Now, let's turn to our updated outlook for fiscal 2026. We are raising our fiscal 2026 outlook on the top and bottom lines, primarily driven by rhode's outperformance.
Mandy Fields: We ended the quarter with $197 million in cash on hand, compared to a cash balance of $74 million a year ago. During the quarter, we repurchased approximately $50 million of our outstanding common stock, given the disconnect we see between e.l.f. Beauty's market valuation and the strength of our business fundamentals. At quarter end, approximately $400 million remained available for repurchase under our previously authorized repurchase program.
Speaker #17: At quarter end, approximately 400 million dollars remained available for repurchase under our previously authorized repurchase program. Our liquidity position remained strong, with less than two times net debt to adjusted EBITDA, even after our acquisition of road.
Mandy Fields: Our liquidity position remains strong, with less than 2x net debt to Adjusted EBITDA, even after our acquisition of rhode. We expect our cash priorities for the year to remain on investing behind our growth initiatives and supporting strategic extensions. Now, let's turn to our updated outlook for fiscal 2026. We are raising our fiscal 2026 outlook on the top and bottom lines, primarily driven by rhode's outperformance.
Speaker #17: We expect our cash priorities for the year to remain on investing behind our growth initiatives and supporting strategic extensions. Now, let's turn to our updated outlook for fiscal '26.
Speaker #17: We are raising our fiscal '26 outlook on the top and bottom lines, primarily driven by road's outperformance. For the full year, we now expect net sales growth of approximately 22 to 23 percent year over year, up from 18 to 20 percent previously.
Mandy Fields: For the full year, we now expect net sales growth of approximately 22% to 23% year-over-year, up from 18% to 20% previously. We expect rhode to contribute approximately $260 to $265 million in net sales to fiscal 2026 versus our expectation for $200 million previously. . . On an annualized basis, our outlook assumes rhode will achieve net sales growth of approximately 70% year-over-year. Looking to the second half, our guidance implies 31% to 33% net sales growth. On an organic basis, excluding rhode, we expect net sales to be up approximately 2%. Let me walk through the building blocks of our organic sales outlook.
Mandy Fields: For the full year, we now expect net sales growth of approximately 22% to 23% year-over-year, up from 18% to 20% previously. We expect rhode to contribute approximately $260 to $265 million in net sales to fiscal 2026 versus our expectation for $200 million previously. . . On an annualized basis, our outlook assumes rhode will achieve net sales growth of approximately 70% year-over-year.
Speaker #17: We expect Road to contribute approximately $260 to $265 million in net sales to fiscal 2026, versus our expectation for $200 million previously. On an annualized basis, our outlook assumes Road will achieve net sales growth of approximately 70% year over year.
Speaker #17: Looking to the second half, our guidance implies 31 to 33 percent net sales growth. On an organic basis, excluding road, we expect net sales to be up approximately 2%.
Mandy Fields: Looking to the second half, our guidance implies 31% to 33% net sales growth. On an organic basis, excluding rhode, we expect net sales to be up approximately 2%. Let me walk through the building blocks of our organic sales outlook.
Speaker #17: Let me walk through the building blocks of our organic sales outlook. We are assuming approximately 6% global consumption growth, similar to what we saw in Q3.
Mandy Fields: We are assuming approximately 6% global consumption growth, similar to what we saw in Q3, partially offset by a four percentage point headwind from pipeline as we cycle significant retail expansion we had in the second half of last year, including the launch of e.l.f. in about 11,000 Dollar General stores and a 50% space expansion for e.l.f. in Target. This dynamic is driving shipments below consumption in the second half of our fiscal year. Our consumption remains strong, and we believe consumption and market share gains are the best indicators of the underlying health of our business. Over a longer period, shipments tend to even out with consumption. The great news is consumers continue to choose our brands, driving our consistent outperformance relative to category trends. Turning to adjusted EBITDA.
Mandy Fields: We are assuming approximately 6% global consumption growth, similar to what we saw in Q3, partially offset by a four percentage point headwind from pipeline as we cycle significant retail expansion we had in the second half of last year, including the launch of e.l.f. in about 11,000 Dollar General stores and a 50% space expansion for e.l.f. in Target. This dynamic is driving shipments below consumption in the second half of our fiscal year.
Speaker #17: Partially offset by a 4 percentage point headwind from pipeline, as we cycle significant retail expansion we had in the second half of last year.
Speaker #17: Including the launch of e.l.f., and about 11,000 Dollar General stores, and a 50% space expansion for e.l.f. in Target. This dynamic is driving shipments below consumption in the second half of our fiscal year.
Speaker #17: Our consumption remains strong, and we believe consumption and market share gains are the best indicators of the underlying health of our business. Over a longer period, shipments tend to even out with consumption.
Mandy Fields: Our consumption remains strong, and we believe consumption and market share gains are the best indicators of the underlying health of our business. Over a longer period, shipments tend to even out with consumption. The great news is consumers continue to choose our brands, driving our consistent outperformance relative to category trends. Turning to adjusted EBITDA.
Speaker #17: The great news is consumers continue to choose our brands, driving our consistent outperformance relative to category trends. Turning to adjusted EBITDA. For the full year, we now expect 323 million to 326 million dollars in adjusted EBITDA.
Mandy Fields: For the full year, we now expect $323 million to $326 million in adjusted EBITDA as compared to our expectation for $302 to $306 million previously, largely due to the outperformance we saw in Q3, partly offset by a timing shift of expenses into Q4. Our outlook implies adjusted EBITDA growing 9% to 10% year-over-year and adjusted EBITDA margins of approximately 20%, which we believe is quite strong considering the level of tariffs we faced this year. Looking to the second half, our outlook implies adjusted EBITDA margins of approximately 19%, down approximately 300 basis points versus last year. There are two key factors. First, marketing.
Mandy Fields: For the full year, we now expect $323 million to $326 million in adjusted EBITDA as compared to our expectation for $302 to $306 million previously, largely due to the outperformance we saw in Q3, partly offset by a timing shift of expenses into Q4.
Speaker #17: As compared to our expectation for $302 to $306 million previously. Largely due to the outperformance we saw in Q3, partly offset by a timing shift of expenses into Q4.
Speaker #17: Our outlook implies adjusted EBITDA growing 9 to 10 percent year over year, and adjusted EBITDA margins of approximately 20 percent, which we believe is quite strong considering the level of tariffs we've faced this year.
Mandy Fields: Our outlook implies adjusted EBITDA growing 9% to 10% year-over-year and adjusted EBITDA margins of approximately 20%, which we believe is quite strong considering the level of tariffs we faced this year. Looking to the second half, our outlook implies adjusted EBITDA margins of approximately 19%, down approximately 300 basis points versus last year. There are two key factors. First, marketing.
Speaker #17: Looking to the second half. Our outlook implies adjusted EBITDA margins of approximately approximately 300 basis points versus last 19 percent, down year. factors. First, marketing.
Speaker #17: Looking to the second half, our outlook implies adjusted EBITDA margins of approximately 300 basis points below last year's 19 percent. There are two key factors. We expect marketing spend to be about 27 percent of net sales in the second half, up about 200 basis points relative to the 25 percent of net sales we spent in the second half of last year.
Mandy Fields: We expect marketing spend to be about 27% of net sales in the second half, up about 200 basis points relative to the 25% of net sales we spent in the second half of last year. We have a number of marketing campaigns planned in Q4, including a new commercial debuting at the big game that Tarang mentioned, an activity we did not participate in last year. Second, within non-marketing SG&A, we have planned investments in two key areas. First, space expansion. The strength of our brands continues to earn us additional space and distribution, which comes with incremental costs related to fixturing and merchandising. Our second investment area is in our team. We continue to build our team to support the significant white space we see across categories, brands, and geographies. In summary, Q3 marked another quarter of industry-leading growth.
Mandy Fields: We expect marketing spend to be about 27% of net sales in the second half, up about 200 basis points relative to the 25% of net sales we spent in the second half of last year. We have a number of marketing campaigns planned in Q4, including a new commercial debuting at the big game that Tarang mentioned, an activity we did not participate in last year. Second, within non-marketing SG&A, we have planned investments in two key areas. First, space expansion.
Speaker #17: We have a number of marketing campaigns planned in Q4, including a new commercial debuting at the big game that terrain mentioned. An activity we did not participate in last year.
Speaker #17: Second, within non-marketing SG&A. We have planned investments in two key areas. First, space expansion. The strength of our brands continues to earn us additional space and distribution, which comes with incremental costs related to fixturing and merchandising.
Mandy Fields: The strength of our brands continues to earn us additional space and distribution, which comes with incremental costs related to fixturing and merchandising. Our second investment area is in our team. We continue to build our team to support the significant white space we see across categories, brands, and geographies. In summary, Q3 marked another quarter of industry-leading growth.
Speaker #17: Our second investment area is in our team. We continue to build our team to support the significant white space we see across categories, brands, and geographies.
Speaker #17: In summary, Q3 marked another quarter of industry-leading growth. Our business fundamentals remain strong, and we continue to make progress, unlocking the full potential we see for our portfolio of disruptive brands.
Mandy Fields: Our business fundamentals remain strong, and we continue to make progress, unlocking the full potential we see for our portfolio of disruptive brands. With that, operator, you may open the call to questions.
Mandy Fields: Our business fundamentals remain strong, and we continue to make progress, unlocking the full potential we see for our portfolio of disruptive brands. With that, operator, you may open the call to questions.
Speaker #17: With that operator, you may open the call to questions.
Speaker #1: Ladies and gentlemen, at this time, we'll begin the question and answer session. Touchstone telephone. To withdraw your questions, you may press star and two.
Operator: Ladies and gentlemen, at this time, we'll begin the question-and-answer session. Press star and then one on your touchtone telephone. To withdraw your question, you may press star and two. If you are using a speakerphone, we do ask that you please pick up the handset prior to pressing the keys to ensure the best sound quality. Once again, that is star and then one to join the question queue. Our first question today comes from Olivia Tong from Raymond James. Please go ahead with your question.
Operator: Ladies and gentlemen, at this time, we'll begin the question-and-answer session. Press star and then one on your touchtone telephone. To withdraw your question, you may press star and two. If you are using a speakerphone, we do ask that you please pick up the handset prior to pressing the keys to ensure the best sound quality. Once again, that is star and then one to join the question queue. Our first question today comes from Olivia Tong from Raymond James. Please go ahead with your question.
Speaker #1: If you are using a speakerphone, we do ask that you please pick up the handset prior to pressing the keys to ensure the best experience. It is star and then one to join the question queue.
Speaker #1: Our first question today comes from Olivia Tong sound quality. Once again, that from Raymond James. Please go ahead with your question.
Speaker #2: Great. Thanks. So first question is just a better understanding about your approach to spending, as well as guidance. Great quarter for December quarter, but looks like you're expecting EBITDA margins in the low double-digit range for Q4.
[Analyst] (Raymond James): Great, thanks. So first question is just a better understanding about your approach to spending as well as guidance. Great quarter for the summer quarter, but looks like you're expecting EBITDA margins in the low double-digit range for Q4. So obviously, there's the Super Bowl ad. You talked about some of the other spending plans, but I would assume that rhode and FX also provide tailwinds on margins. So just if you could unpack that first. And then second is just around your ability to expand rhode at a faster pace. There's great momentum there. So you know, you talked about Australia, upcoming, but there's obviously a lot of world out there and, you already have exposure in Western Europe. So just thinking about the path forward for rhode from here. Thank you.
Olivia Tong: Great, thanks. So first question is just a better understanding about your approach to spending as well as guidance. Great quarter for the summer quarter, but looks like you're expecting EBITDA margins in the low double-digit range for Q4. So obviously, there's the Super Bowl ad. You talked about some of the other spending plans, but I would assume that rhode and FX also provide tailwinds on margins.
Speaker #2: So, obviously, there's a Super Bowl ad. You talked about some of the other spending plans, but I would assume that road and FX also provide tailwinds on margins.
Speaker #2: So just if you could unpack that first—your ability to expand road at. And then, second, just around a faster pace. There's great momentum there.
Olivia Tong: So just if you could unpack that first. And then second is just around your ability to expand rhode at a faster pace. There's great momentum there. So you know, you talked about Australia, upcoming, but there's obviously a lot of world out there and, you already have exposure in Western Europe. So just thinking about the path forward for rhode from here. Thank you.
Speaker #2: So you talked about Australia upcoming. But there's obviously a lot of world out there, and you already have talked about the path forward for road from here.
Speaker #2: Thank
Speaker #2: you. Hi,
Speaker #3: Olivia. I'll take the first question. We'll let terrain take the second one. So on EBITDA margin, you really have to look at the second half in total and so when you look at the second half, we're actually outlooking around a 19 percent adjusted EBITDA margin.
Mandy Fields: Hi, Olivia. I'll take the first question, we'll let Tarang take the second one. So on EBITDA margin, you really have to look at the second half in total. And so when you look at the second half, we're actually outlooking around a 19% adjusted EBITDA margin, and that's up from around 17% previously. And so we talked about seeing some costs shift from Q3 into Q4. That was inclusive of marketing, where we had some cost shift and where we've added additional spend, as we've talked about, and you've seen the marketing in action with the collaborations that we've done, just at the start of 2026 calendar year, and with the Super Bowl activation or the big game activation that we have coming this weekend.
Mandy Fields: Hi, Olivia. I'll take the first question, we'll let Tarang take the second one. So on EBITDA margin, you really have to look at the second half in total. And so when you look at the second half, we're actually outlooking around a 19% adjusted EBITDA margin, and that's up from around 17% previously.
Speaker #3: And that's up from around 17 percent previously. And so we talked about seeing some costs That was inclusive of marketing. we've added additional spend Where we had some cost shift and where as we've talked about, and you've seen the marketing in action with the collaborations that we've done.
Mandy Fields: And so we talked about seeing some costs shift from Q3 into Q4. That was inclusive of marketing, where we had some cost shift and where we've added additional spend, as we've talked about, and you've seen the marketing in action with the collaborations that we've done, just at the start of 2026 calendar year, and with the Super Bowl activation or the big game activation that we have coming this weekend.
Speaker #3: Just as a start of 2026, calendar year, and with the super bowl activation or the big game activation that we have coming this weekend.
Speaker #3: And so those are some of the areas in addition to kind of team and infrastructure that we've talked about making those investments in. But overall, second half outlook on adjusted EBITDA is better than previously expected.
Speaker #3: And so those are some of the areas, in addition to kind of team and infrastructure, that we've talked about making those investments in. But overall, second half outlook on adjusted EBITDA is better than previously expected.
Mandy Fields: And so, those are some of the areas, in addition to kind of team and infrastructure, that we've talked about making those investments in. But overall, second half outlook on Adjusted EBITDA is better than previously expected.
Mandy Fields: And so, those are some of the areas, in addition to kind of team and infrastructure, that we've talked about making those investments in. But overall, second half outlook on Adjusted EBITDA is better than previously expected.
Speaker #4: Hi, Olivia. This is terrain. I'll take the second question on expanding road at a faster pace. I tell you is less about expanding What road at a faster pace, but continuing the excellence of launches that we've had.
Tarang Amin: Hi, Olivia, this is Tarang. I'll take the second question on expanding rhode at a faster pace. What I'd tell you is less about expanding rhode at a faster pace, but continuing the excellence of launches that we've had. rhode growth has been phenomenal, outpacing anyone's expectations. And if you look at it, it's really the quality of execution that we've had. Sephora North America, the biggest launch ever, number one position there. I look at Sephora UK, 5x bigger than the next biggest launch. We're tremendously excited. I think next week, we launch with MECCA in Australia and New Zealand. And so it's more about making sure we're being disciplined in the rollout. Now, the great news, as you heard in the prepared remarks, is this tremendous pent-up demand for rhode.
Tarang Amin: Hi, Olivia, this is Tarang. I'll take the second question on expanding rhode at a faster pace. What I'd tell you is less about expanding rhode at a faster pace, but continuing the excellence of launches that we've had. rhode growth has been phenomenal, outpacing anyone's expectations. And if you look at it, it's really the quality of execution that we've had. Sephora North America, the biggest launch ever, number one position there.
Speaker #4: Road growth has been phenomenal, outpacing anyone's expectations. And if you look at it, it's really the quality of execution that we've had. It's a four in North America, the biggest launch ever, number one position there.
Speaker #4: Look at Sephora UK, 5X bigger than the next biggest launch. We're tremendously excited. I think next week we launch with Mecca in Australia, New Zealand.
Tarang Amin: I look at Sephora UK, 5x bigger than the next biggest launch. We're tremendously excited. I think next week, we launch with MECCA in Australia and New Zealand. And so it's more about making sure we're being disciplined in the rollout. Now, the great news, as you heard in the prepared remarks, is this tremendous pent-up demand for rhode.
Speaker #4: And so it's more about making sure we're being disciplined in the the prepared remarks, is there's rollout. percent of our DTC sales are Now, the great news, as you heard in outside the US, yet 74 percent of our social followers are outside the US.
Tarang Amin: Only 20% of our DTC sales are outside the US, yet 74% of our social followers are outside the US. So we have very high aspirations in terms of the globalization of rhode over time, but we want to make sure we're doing it with the same level of quality and care that we've done so far in both North America and the UK, and soon to be, Australia and New Zealand.
Tarang Amin: Only 20% of our DTC sales are outside the US, yet 74% of our social followers are outside the US. So we have very high aspirations in terms of the globalization of rhode over time, but we want to make sure we're doing it with the same level of quality and care that we've done so far in both North America and the UK, and soon to be, Australia and New Zealand.
Speaker #4: So we have very high tremendous pent-up demand for road. aspirations in terms of the globalization Only 20 of road over time, but we want to make sure we're doing it with the same level of quality and care that we've done so far in both North America and the UK and soon to be Australia and New Zealand.
Speaker #2: Great. e.l.f. brand, can you talk about some of the things that you're planning to do in order—thanks. And then in terms of the core there, clearly you've got some strong laps that you have to go against, but you talked about some of the additional shelf space.
[Analyst] (Raymond James): Great, thanks. And then in terms of the core e.l.f. brand, can you talk about some of the things that you're planning to do, in order to drive incremental growth there? You know, clearly, you've got some strong laps that you have to go against, but you talked about some of the additional shelf space. What about international launches further than the ones that you've already announced?
Olivia Tong: Great, thanks. And then in terms of the core e.l.f. brand, can you talk about some of the things that you're planning to do, in order to drive incremental growth there? You know, clearly, you've got some strong laps that you have to go against, but you talked about some of the additional shelf space. What about international launches further than the ones that you've already announced?
Speaker #2: What about international launches further than the ones that you've already announced?
Speaker #4: Sure, Olivia. I guess the first thing I'll tell you is we're using the same strategy that's driven 28 consecutive quarters of not only net sales growth, but also market share gains.
Tarang Amin: Well, Olivia, I guess the first thing I'd tell you is we're using the same strategy that's driven 28 consecutive quarters of not only net sales growth, but market share gains. I sometimes feel that people don't fully appreciate just how phenomenal the market share gains have been and as consistent. We've gone back as far as we can look; we've not seen another cosmetics brand grow market share for 28 consecutive quarters, and even in Q3, building 130 basis points of market share is pretty phenomenal. So I'd say our core proposition, our value proposition, powerhouse innovation, and disruptive marketing engine, many examples that you heard on this call will continue to fuel the brand.
Tarang Amin: Well, Olivia, I guess the first thing I'd tell you is we're using the same strategy that's driven 28 consecutive quarters of not only net sales growth, but market share gains. I sometimes feel that people don't fully appreciate just how phenomenal the market share gains have been and as consistent.
Speaker #4: I sometimes feel that people don't fully appreciate just how phenomenal the market share gains have been, and how consistent we've been going back as far as we can look.
Speaker #4: We've not seen another cosmetics brand grow market share for 28 consecutive quarters. And even in Q3, building 130 bases of market share is pretty phenomenal.
Tarang Amin: We've gone back as far as we can look; we've not seen another cosmetics brand grow market share for 28 consecutive quarters, and even in Q3, building 130 basis points of market share is pretty phenomenal. So I'd say our core proposition, our value proposition, powerhouse innovation, and disruptive marketing engine, many examples that you heard on this call will continue to fuel the brand.
Speaker #4: So our proposition, powerhouse innovation, and disruptive marketing engine—many examples that you heard on this call—will continue to fuel the brand. And in terms of e.l.f., one of the real strengths that we have is, at every one of our major retailers, we're their most productive brand on a dollar per linear foot basis.
Tarang Amin: In terms of continued growth on e.l.f., one of the real strengths that we have is every one of our major retailers, we're their most productive brand on a dollar per linear foot basis, and that naturally leads to more space and more support. You're seeing that right now with the rollout that we have at Ulta Beauty in terms of more space. I'm particularly excited about the rollout coming up pretty soon with dm in Germany. It will bring, building on the phenomenal launch we had last year with Rossmann in Germany, as well as with Amazon. It really will bring e.l.f. to the majority of German consumers.
Tarang Amin: In terms of continued growth on e.l.f., one of the real strengths that we have is every one of our major retailers, we're their most productive brand on a dollar per linear foot basis, and that naturally leads to more space and more support.
Speaker #4: And that naturally leads to more space and more support. You're seeing that right now with the rollout that we have at Ulta Beauty in terms of more space, particularly excited about the rollout coming up pretty soon with DM in Germany.
Tarang Amin: You're seeing that right now with the rollout that we have at Ulta Beauty in terms of more space. I'm particularly excited about the rollout coming up pretty soon with dm in Germany. It will bring, building on the phenomenal launch we had last year with Rossmann in Germany, as well as with Amazon. It really will bring e.l.f. to the majority of German consumers.
Speaker #4: It will bring building on the phenomenal launch we had last year with Rossmann in Germany as well as with Amazon. It really will bring elf to the majority of German consumers.
Speaker #4: And I'd say that's probably the last thing I'd say—is our ability not only to seed the brand in different countries, but then really build out our presence in those countries, like we did in Canada, the UK, soon to be Germany. Really, I think there's a ton of potential both in the US as well as internationally.
Tarang Amin: And I'd say that's probably the last thing I'd say, is our ability not only to seed the brand in different countries, but then really build out our presence in those countries like we did in Canada, UK, soon to be Germany. Really, I think there's a ton of potential, both in the US as well as internationally.
Tarang Amin: And I'd say that's probably the last thing I'd say, is our ability not only to seed the brand in different countries, but then really build out our presence in those countries like we did in Canada, UK, soon to be Germany. Really, I think there's a ton of potential, both in the US as well as internationally.
Speaker #1: Our next question comes from Dara Museny from Morgan Stanley. Please go ahead with your
Operator: Our next question comes from Dara Mohsenian from Morgan Stanley. Please go ahead with your question.
Operator: Our next question comes from Dara Mohsenian from Morgan Stanley. Please go ahead with your question.
Speaker #1: question. Hey,
Speaker #5: guys. Terrain, I was hoping you could give us a bit of a State of the Union on the base elf cosmetics business in the US just heading into the spring.
[Analyst] (Morgan Stanley): Hey, guys. Tarang, I was hoping you could give us a bit of a state of the union on the base e.l.f. Cosmetics business in the US just heading into the spring. You're obviously coming off a very large price increase. Maybe looking backwards, how do you think that's been received at the consumer level? Should we expect to see volume pick back up going forward as some of the sticker shock wears off? And then you had the huge spring innovation pipeline a couple of years back, not quite as strong last year. You mentioned some exciting products today coming up. Just any perspective on the overall innovation pipeline for the spring this year relative to last year, and any additional thoughts around the US in terms of category growth here or other important dynamics?
Dara Mohsenian: Hey, guys. Tarang, I was hoping you could give us a bit of a state of the union on the base e.l.f. Cosmetics business in the US just heading into the spring. You're obviously coming off a very large price increase. Maybe looking backwards, how do you think that's been received at the consumer level? Should we expect to see volume pick back up going forward as some of the sticker shock wears off?
Speaker #5: You're obviously coming off a very large price increase. Maybe looking backwards, how do you think that's been received at the consumer level? Should we expect to see volume pick back up going forward as some of the sticker shock wears off?
Speaker #5: And then you had the huge spring innovation pipeline a couple of years back, not quite as strong last year. You mentioned some exciting products today coming up.
Dara Mohsenian: And then you had the huge spring innovation pipeline a couple of years back, not quite as strong last year. You mentioned some exciting products today coming up. Just any perspective on the overall innovation pipeline for the spring this year relative to last year, and any additional thoughts around the US in terms of category growth here or other important dynamics?
Speaker #5: Just any perspective on the overall innovation pipeline for the spring this year relative to last year and any additional thoughts around the or other important dynamics?
Speaker #5: And then maybe just second, you spoke about international for road, but can you just give us an update on innovation and portfolio plans around road in the US and fiscal 27?
[Analyst] (Morgan Stanley): Then maybe just second, you spoke about international for rhode, but can you just give us an update on innovation and portfolio plans around rhode in the US in fiscal 2027? Are there any plans to move into additional product subcategories? And just as you think about the brand longer term, how do you look to extend the durability and sustain the momentum that you've seen this year? Thanks.
Dara Mohsenian: Then maybe just second, you spoke about international for rhode, but can you just give us an update on innovation and portfolio plans around rhode in the US in fiscal 2027? Are there any plans to move into additional product subcategories? And just as you think about the brand longer term, how do you look to extend the durability and sustain the momentum that you've seen this year? Thanks.
Speaker #5: Are there any plans to move into additional products subcategories? And just as you think about the look to extend the durability and sustain the momentum that you've seen this year?
Speaker #5: Thanks.
Speaker #4: Sure. Hi,
Speaker #4: Dara. So I'd say first of all on the state of the elf brand in the US, it's never been healthier. Our consumption is twice the category we continue to build share as I talked earlier.
Tarang Amin: Hi, Dara. So I'd say, first of all, in the state of the e.l.f. brand in the US, it's never been healthier. Our category, our consumption is twice the category. We continue to build share, as I talked earlier. And one of the things that was, I was really pleased by was the execution on our price increase. We took a 15% price increase, and we saw single digit unit declines, which is actually quite good, and you're seeing that in the dollars that year as we go forward. Usually, spring is a time that many of our competitors usually take price increases. We're different than a lot of our competitors, that historically we've grown through unit volumes, whereas a lot of our competitors have grown through price increases and AUR.
Tarang Amin: Hi, Dara. So I'd say, first of all, in the state of the e.l.f. brand in the US, it's never been healthier. Our category, our consumption is twice the category. We continue to build share, as I talked earlier. And one of the things that was, I was really pleased by was the execution on our price increase
Speaker #4: things that was I was really pleased And one of the by was the execution on our price increase. We took a 15 percent price increase and we saw single declines, which is actually quite good.
Tarang Amin: . We took a 15% price increase, and we saw single digit unit declines, which is actually quite good, and you're seeing that in the dollars that year as we go forward. Usually, spring is a time that many of our competitors usually take price increases. We're different than a lot of our competitors, that historically we've grown through unit volumes, whereas a lot of our competitors have grown through price increases and AUR.
Speaker #4: And you're seeing that in the dollars that you're as we go forward. Usually spring is a time that many of our competitors usually take price increases.
Speaker #4: We're different than a lot of our competitors that historically we've grown through unit volumes. Whereas a lot of our competitors have grown through price increases in AUR.
Speaker #4: So we do believe our value proposition will continue to get better. As time goes on, given that we've already taken our pricing Second, as I think about accepted that.
Tarang Amin: So we do believe our value proposition will continue to get better as time goes on, given that we've already taken our pricing and we led with pricing, and the consumers have accepted that. Second, as I think about innovation, you're right, 2024 was the biggest year we ever had in innovation. 2025 was the second biggest year of innovation we had. So it was not as big as 2024, but it still was a good innovation year. So we do have that consistency. You know, we mentioned earlier, 1,800 cosmetics and skincare brands, yet we held, in 2025, 4 of the top 10 positions from an innovation standpoint, on top of 6 of the top 10 positions the year before. So really have proven strength and innovation and our ability to do so.
Tarang Amin: So we do believe our value proposition will continue to get better as time goes on, given that we've already taken our pricing and we led with pricing, and the consumers have accepted that. Second, as I think about innovation, you're right, 2024 was the biggest year we ever had in innovation. 2025 was the second biggest year of innovation we had. So it was not as big as 2024, but it still was a good innovation year.
Speaker #4: innovation, you're right, 2024 was the biggest year we ever had in innovation. 2025 was the had. So it was not as big as second biggest year of innovation we year.
Speaker #4: 2024, but it still was a good innovation So we do have that consistency. We mentioned earlier, 1,800 cosmetics and skincare brands yet we held in 2025 four of the top 10 positions from an innovation standpoint on top of six of the top 10 positions the year before.
Tarang Amin: So we do have that consistency. You know, we mentioned earlier, 1,800 cosmetics and skincare brands, yet we held, in 2025, 4 of the top 10 positions from an innovation standpoint, on top of 6 of the top 10 positions the year before. So really have proven strength and innovation and our ability to do so.
Speaker #4: So really have proven strength in innovation and our ability to do so. I'm particularly excited about the innovation we have this spring we mentioned our slip stick at $10 versus a prestige item at 48.
Tarang Amin: I'm particularly excited about the innovation we have this spring. You know, we mentioned our Slip Stick at $10 versus a prestige item at $48. I look at our Soft Glam Satin Concealer at a jaw-dropping price of $5 versus a prestige item at $32. And we have a number of other innovation items that I feel really good about. Now, we won't get a full read on those. While it's promising early days in terms of our own site and places we've launched them, really over the next few weeks is when we'll get a much better sense on the spring innovation and how it compares to 2025 as we go forward. We also have very strong innovation plans across our brands. So you mentioned Rhode.
Tarang Amin: I'm particularly excited about the innovation we have this spring. You know, we mentioned our Slip Stick at $10 versus a prestige item at $48. I look at our Soft Glam Satin Concealer at a jaw-dropping price of $5 versus a prestige item at $32. And we have a number of other innovation items that I feel really good about.
Speaker #4: I look at our Soft Glam Satin Concealer at a jaw-dropping price of $5 versus a prestige item at $32. And we have a number of other innovation items that I feel really good about.
Speaker #4: Now, we won't get a full read on those. Well, it's promising early days in terms of our own site and places we've launched them.
Tarang Amin: Now, we won't get a full read on those. While it's promising early days in terms of our own site and places we've launched them, really over the next few weeks is when we'll get a much better sense on the spring innovation and how it compares to 2025 as we go forward. We also have very strong innovation plans across our brands. So you mentioned Rhode.
Speaker #4: Really, over the next few weeks is when we'll get a much better sense on the spring innovation and how it compares to 2025 as we go forward.
Speaker #4: We also have very strong innovation plans across our brands. So you mentioned road. Road, if you look right now, we just launched a face mask as well as a lip mask as a major activation taking place in Montana right now on that.
Tarang Amin: rhode, if you look right now, we just launched a face mask as well as a lip mask. There's a major activation taking place this month, and they're right now on that, and what we see is just really great consumer acceptance on rhode innovation because it is so cool, curated, and thoughtful. The one of everything really good works for rhode. Naturium also has a very strong plan, as does e.l.f. SKIN and Well People. So innovation is definitely one of the key drivers of our business, and feel great about that. Last, you asked about the category. You know, I've long been bullish about the beauty category, particularly cosmetics and skincare, and we're seeing some of the healthiest category growth rates we've seen in quite some time.
Tarang Amin: rhode, if you look right now, we just launched a face mask as well as a lip mask. There's a major activation taking place this month, and they're right now on that, and what we see is just really great consumer acceptance on rhode innovation because it is so cool, curated, and thoughtful.
Speaker #4: And what we see is just really great consumer acceptance on road innovation because it is so everything really good works Naturium also has a very strong plan as does elf skin.
Tarang Amin: The one of everything really good works for rhode. Naturium also has a very strong plan, as does e.l.f. SKIN and Well People. So innovation is definitely one of the key drivers of our business, and feel great about that. Last, you asked about the category. You know, I've long been bullish about the beauty category, particularly cosmetics and skincare, and we're seeing some of the healthiest category growth rates we've seen in quite some time.
Speaker #4: And well people. So innovation is definitely one of the key drivers of our for road. that. Last you asked about the business. category. I've long been bullish about the And I feel great about beauty category, particularly cosmetics and skincare.
Speaker #4: And we're seeing some of the healthiest category growth rates we've seen in quite quarter, the color cosmetics category is up 4 percent. The skincare category is up 8 percent.
Tarang Amin: So in this last quarter, the color cosmetics category is up 4%, the skincare category is up 8%. You know, I'm glad that e.l.f. was more than double both of those category growth rates, but that's always great to have a tailwind when it comes from a category standpoint. So not only is the category healthy, but we're particularly well positioned with our value proposition, innovation, and marketing within that.
Tarang Amin: So in this last quarter, the color cosmetics category is up 4%, the skincare category is up 8%. You know, I'm glad that e.l.f. was more than double both of those category growth rates, but that's always great to have a tailwind when it comes from a category standpoint. So not only is the category healthy, but we're particularly well positioned with our value proposition, innovation, and marketing within that.
Speaker #4: I'm glad about those category growth rates, but that's always great to have a tailwind when it comes from a category standpoint. So not only is the category healthy, with our value proposition, but we're particularly well-positioned in innovation and marketing within that.
Speaker #1: Our next question comes from Andrea Teixeira from J.P. Morgan. Please go ahead with your question.
Operator: Our next question comes from Andrea Teixeira from J.P. Morgan. Please go ahead with your question.
Operator: Our next question comes from Andrea Teixeira from J.P. Morgan. Please go ahead with your question.
Speaker #6: Thank you, Tarang. Good afternoon, everyone. I just wanted to kind of dig into Tarang, what you just said in terms of innovation, but also from a perspective of subcategories. I know you have like 50 to 60 percent in market share for primers.
[Analyst] (J.P. Morgan): Thank you, operator. Good afternoon, everyone. I just wanted to kind of like dig into Tarang, what you just said in terms of innovation, but also from a perspective of subcategories. I know you have, like, 50 to 60% in market share for primers. You basically created some of these items, right, in a way, or basically brought these items to from prestige into a more affordable price point. So I was wondering, and now your like the two other very big subcategories, lip and mascaras, you have been pushing, particularly lip. As we think about the consumer being more stretched, maybe she wants to make sure that she has more basic items, like lipsticks and mascaras.
Andrea Teixeira: Thank you, operator. Good afternoon, everyone. I just wanted to kind of like dig into Tarang, what you just said in terms of innovation, but also from a perspective of subcategories. I know you have, like, 50 to 60% in market share for primers.
Speaker #6: You basically created some of these some of these items, right, in a way. Or basically brought these items to from prestige into more affordable price point.
Andrea Teixeira: You basically created some of these items, right, in a way, or basically brought these items to from prestige into a more affordable price point. So I was wondering, and now your like the two other very big subcategories, lip and mascaras, you have been pushing, particularly lip. As we think about the consumer being more stretched, maybe she wants to make sure that she has more basic items, like lipsticks and mascaras.
Speaker #6: So I was wondering now your the two other very big and mascaras, you have been pushing, particularly lip, as we think about the consumer being more stretched, maybe she wants to make sure that she has more basic items like lipsticks and mascaras.
Speaker #6: So I was wondering, I haven't seen any pardon if I missed anything major in mascara so I was hoping to see if you have against the spring and thinking about innovation across where the low-hanging fruits, I'm assuming, are still there, right?
[Analyst] (J.P. Morgan): So I was wondering, I haven't seen any, you know, pardon if I missed anything major in mascara. So I was hoping to see if you have against the spring and thinking about innovation across where the low-hanging fruits, I'm assuming, are still there, right? I mean, if you can kind of give us a perspective of how both your innovation team and your retailers are pulling and asking you to bring affordable items within their aisle or electronic aisle, I should say.
Andrea Teixeira: So I was wondering, I haven't seen any, you know, pardon if I missed anything major in mascara. So I was hoping to see if you have against the spring and thinking about innovation across where the low-hanging fruits, I'm assuming, are still there, right? I mean, if you can kind of give us a perspective of how both your innovation team and your retailers are pulling and asking you to bring affordable items within their aisle or electronic aisle, I should say.
Speaker #6: I mean, if you can kind of give us a perspective of innovation team and your retailers are pulling and asking you to bring affordable items within their subcategories, lip aisle.
Speaker #6: Or electronic aisle, I should say.
Speaker #4: Yeah. So hi, Andrea. So I'll answer that. I'd say first of all, we feel really great about our innovation plans as I just talked.
Tarang Amin: So hi, Andrea. So I'll answer that. I'd say, first of all, we feel really great about our innovation plans, as I just talked, and our strategy is really twofold. Number one is really building strength in those segments that we have very large share positions in. We now have 21 segments where we have the number one or two position, and those become really great competitive moats. Be my guest competing against us in primers or any of the other categories. We have very strong share positions, and we continue to innovate on those. The second is conquesting categories where we're under-shared. If I just look relatively within the categories, in face, we have a 22% share, clear leadership in face. In lip, we went from almost nowhere to a 13% share and, a really strong position in lip.
Tarang Amin: So hi, Andrea. So I'll answer that. I'd say, first of all, we feel really great about our innovation plans, as I just talked, and our strategy is really twofold. Number one is really building strength in those segments that we have very large share positions in. We now have 21 segments where we have the number one or two position, and those become really great competitive moats.
Speaker #4: And our strategy is really twofold. Number one is really building strength in those segments that we have very large share positions in. We now have 21 segments where we have the number one or two position.
Speaker #4: And those become really great competitive moats. Be my guess, competing against where we have very strong share positions. And we continue to innovate on those.
Tarang Amin: Be my guest competing against us in primers or any of the other categories. We have very strong share positions, and we continue to innovate on those. The second is conquesting categories where we're under-shared. If I just look relatively within the categories, in face, we have a 22% share, clear leadership in face. In lip, we went from almost nowhere to a 13% share and, a really strong position in lip.
Speaker #4: The second is conquesting categories where we're undershared. So if I just look relatively within the categories in face, we have a 22 percent share clear leadership in face.
Speaker #4: In lip, we went from almost nowhere to a 13 percent share and a really strong position in lip. innovate in lip, building on We continue to reviver.
Tarang Amin: We continue to innovate in lip, building on the success we had with Glow Reviver, a couple of years ago with our Slipstick. I mean, it's basically lipstick on a stick, which is a phenomenal form. And then in eye, we now have, I mean, literally it was nowhere to 9% share in eye, and we continue to have innovation across all three of those segments, and you'll continue to see more. I think some of our mascara innovation that's coming out is slated, closer to the fall timeframe, that you'll see. So. We've been pretty consistent. We've been chipping away at kind of mascara share as well as overall eye share and lip share for a while.
Tarang Amin: We continue to innovate in lip, building on the success we had with Glow Reviver, a couple of years ago with our Slipstick. I mean, it's basically lipstick on a stick, which is a phenomenal form.
Speaker #4: A couple of years ago, with our Slip Stick—I mean, it's basically lipstick on a stick. The success we have with Glow, which is phenomenal, to 9 percent share in eye.
Tarang Amin: And then in eye, we now have, I mean, literally it was nowhere to 9% share in eye, and we continue to have innovation across all three of those segments, and you'll continue to see more. I think some of our mascara innovation that's coming out is slated, closer to the fall timeframe, that you'll see. So. We've been pretty consistent. We've been chipping away at kind of mascara share as well as overall eye share and lip share for a while.
Speaker #4: And we continue to have innovation across all three of those segments. And you'll continue to see more. I think some of our mascara innovation that's coming out is slated closer to the fall timeframe.
Speaker #4: That you'll see. So and we've been pretty consistent. We've been chipping away at kind of mascara share as well as overall eye share. And lip share for a while.
Speaker #4: Good about the innovation strategy, both leveraging the strengths that we have and continuing to—so I feel—feed that, including our growing franchises in other segments.
Tarang Amin: So I feel good about the innovation strategy, both leveraging the strengths that we have, continuing to feed that, including our growing franchises and extending those franchises in other segments, as well as what we have on the innovation pipeline, both in the spring as well as upcoming in the fall and as I look at next spring. So you'll continue to see that work. And then the last area, even though you didn't ask for it, is the progress we're making in skincare. We now have three of the fastest growing brands in skincare. I feel really good about the innovation we have on e.l.f. SKIN, the round of innovation we have on Naturium and Rhode, as I just mentioned. We really have really stepped up our ability in skincare and also the momentum we're seeing there.
Tarang Amin: So I feel good about the innovation strategy, both leveraging the strengths that we have, continuing to feed that, including our growing franchises and extending those franchises in other segments, as well as what we have on the innovation pipeline, both in the spring as well as upcoming in the fall and as I look at next spring.
Speaker #4: As well as what we have on the innovation pipeline, both in the franchises. And extending those see that work. And then the last look at next spring.
Tarang Amin: So you'll continue to see that work. And then the last area, even though you didn't ask for it, is the progress we're making in skincare. We now have three of the fastest growing brands in skincare. I feel really good about the innovation we have on e.l.f. SKIN, the round of innovation we have on Naturium and Rhode, as I just mentioned. We really have really stepped up our ability in skincare and also the momentum we're seeing there.
Speaker #4: area, even though you didn't ask about it, is the progress we're making in skincare. We now So you'll continue to have three of the fastest growing brands in skincare.
Speaker #4: I feel really good about the innovation we have on elf skin. The round of innovation we've had on Naturium and road, as I just mentioned, we really have really stepped up our we're seeing
Speaker #3: And just to add to that, Andrea, I'll ability in skincare and also the momentum
Speaker #3: just add on that from because you asked about the value and bringing that to our there. retailers. 75 percent $10 or less overall. So we are very much focused on bringing that value to of our portfolio still sits at our retailers, to our consumers.
Mandy Fields: Just to add to that, Andrea, I would just add on that from, because you asked about our value and bringing that to our retailers, you know, 75% of our portfolio still sits at $10 or less overall. So we are very much focused on bringing that value to our retailers, to our consumers. And Tarang highlighted our Soft Glam Satin Concealer, which we're launching at a $5 price point, which is really incredible, and a very competitive price point in the category. And so that's always gonna continue to be our focus. How do we bring that value to life for our consumers?
Mandy Fields: Just to add to that, Andrea, I would just add on that from, because you asked about our value and bringing that to our retailers, you know, 75% of our portfolio still sits at $10 or less overall. So we are very much focused on bringing that value to our retailers, to our consumers. And Tarang highlighted our Soft Glam Satin Concealer, which we're launching at a $5 price point, which is really incredible, and a very competitive price point in the category. And so that's always gonna continue to be our focus. How do we bring that value to life for our consumers?
Speaker #3: And Terrain highlighted our Soft Glam Satin Concealer, which we're launching at a $5 price point, which is really incredible. And a very competitive price point in the category.
Speaker #3: And so that's always going to continue to be our focus. How do we bring that value to life for our consumers?
Speaker #1: from UBS. Please go ahead with your question. Last question comes from Peter Grom
Operator: Next question comes from Peter Grom from UBS. Please go ahead with your question.
Operator: Next question comes from Peter Grom from UBS. Please go ahead with your question.
Speaker #7: afternoon, Great. Thank you. Good everybody. Can I just ask on the of road, just US split of the 128 million versus international? And I just ask this in the context of it would imply that for the base business of the US, it would be pretty challenged if the ED20 rule kind of applied.
[Company Representative] (e.l.f. Beauty): Great. Thank you, and good afternoon, everyone. Can I just ask on the split of the $120 million of rhode, just US versus international? And I just ask this in the context of it would imply that for the base business in the US, it would be pretty challenged if the ED-20 rule kind of applies. So just maybe you help us understand that. And then just on the 6% consumption that you expect in the back half of the year, you know, maybe could you outline specifically, is that what you expect for Q4? And can you break that down US versus international? Thanks.
Peter Grom: Great. Thank you, and good afternoon, everyone. Can I just ask on the split of the $120 million of rhode, just US versus international? And I just ask this in the context of it would imply that for the base business in the US, it would be pretty challenged if the ED-20 rule kind of applies. So just maybe you help us understand that. And then just on the 6% consumption that you expect in the back half of the year, you know, maybe could you outline specifically, is that what you expect for Q4? And can you break that down US versus international? Thanks.
Speaker #7: So just maybe you help us understand that. And then just on the 6 percent consumption that you expect in the back half of the year, maybe could you outline specifically, is that what you expect for 4Q?
Speaker #7: And can you break that down US versus international? Thanks.
Speaker #3: Hi, Peter. So, for Road overall, look, we're very pleased with Road's performance—$128 million contribution to the quarter. We haven't broken that out across international and U.S.
Mandy Fields: ... Hi, Peter. So for Rhode, overall, look, we're very pleased with Rhode's performance, $128 million contribution to the quarter. We haven't broken that out across international and US, but the 20% is relatively close, right? We talked about Rhode having 20% of their business outside of the US. We also talked on the call about seeing softness in some of our key markets on the organic business in the UK, as we've seen a highly promotional environment, that has remained the case throughout the holiday. And then also in Germany, where we're cycling the launch of Rossmann Germany.
Mandy Fields: ... Hi, Peter. So for Rhode, overall, look, we're very pleased with Rhode's performance, $128 million contribution to the quarter. We haven't broken that out across international and US, but the 20% is relatively close, right? We talked about Rhode having 20% of their business outside of the US.
Speaker #3: But the 20 percent is relatively close, right? We talked about road having 20 percent of their business outside of the US. We also talked on the call about seeing softness in some of our key markets on the organic business in the UK.
Mandy Fields: We also talked on the call about seeing softness in some of our key markets on the organic business in the UK, as we've seen a highly promotional environment, that has remained the case throughout the holiday. And then also in Germany, where we're cycling the launch of Rossmann Germany.
Speaker #3: As we've seen a highly promotional environment that has remained the case throughout the holiday. And then also in Germany, where we're cycling the launch of Rossmann Germany.
Speaker #3: our overall consumption that we're And so when we think about implying, the 6 percent is what we see for the second half of the year.
Mandy Fields: And so, when we think about our overall consumption that we're implying, the 6% is what we see for the second half of the year, and that is gonna be offset by that 4-point headwind from the pipeline, as we talked on the call. So that's kind of how we get to our net sales outlook, for the second half overall.
Mandy Fields: And so, when we think about our overall consumption that we're implying, the 6% is what we see for the second half of the year, and that is gonna be offset by that 4-point headwind from the pipeline, as we talked on the call. So that's kind of how we get to our net sales outlook, for the second half overall.
Speaker #3: And that is going to be offset by that 4-point headwind from the pipeline as we talked on the call. So that's kind of how we get to our net sales outlook for the second half overall.
Speaker #1: Our next question comes from Sydney Wagner from Jefferies. Please go ahead with your question.
Operator: Our next question comes from Sydney Wagner from Jefferies. Please go ahead with your question.
Operator: Our next question comes from Sydney Wagner from Jefferies. Please go ahead with your question.
Speaker #8: question. Can you help Hi. Thanks for taking our contextualize where you see the largest buckets of share gain opportunity going forward for core elf?
[Analyst] (Jefferies): Hi, thanks for taking our question. Can you help contextualize where you see the largest buckets of share gain opportunity going forward for core e.l.f.? Just curious how you think about the level of contribution, maybe from mass tiers, prestige players, or even adjacent non-color beauty categories. And then as you look across international markets, what are the near- and long-term KPIs you're watching most closely to assess brand health and positioning, along with innovation traction for core e.l.f.? Thank you.
Sydney Wagner: Hi, thanks for taking our question. Can you help contextualize where you see the largest buckets of share gain opportunity going forward for core e.l.f.? Just curious how you think about the level of contribution, maybe from mass tiers, prestige players, or even adjacent non-color beauty categories. And then as you look across international markets, what are the near- and long-term KPIs you're watching most closely to assess brand health and positioning, along with innovation traction for core e.l.f.? Thank you.
Speaker #8: Just curious how you think about the level of contribution, maybe from mass tiers prestige players or even adjacent non-color beauty categories. And then as you look across international markets, what are the near and long-term KPIs you're watching most closely to assess brand health and positioning along with innovation traction for core elf?
Speaker #8: Thank
Speaker #8: you.
Speaker #4: Hi, Sydney.
Speaker #4: So on your first question, on the share gains, let me back up a little bit and kind of provide perspective. If you think nationally, we're about a 13 percent share.
Tarang Amin: Hi, Sydney. So on your first question, on the share gains, let me back up a little bit and kind of provide perspective. If you think nationally, we're about a 13% share. At Target, our longest standing national retail customer, we're over 20% of their category. So we see major share gains, including at Target going forward. And it is that combination of leveraging where we have strengths. I don't think anyone thought we'd have a 22% share in face at some point, but we're not done there with the innovation we have, and we certainly have major opportunity in both lip and mascara and the innovation to help conquest those.
Tarang Amin: Hi, Sydney. So on your first question, on the share gains, let me back up a little bit and kind of provide perspective. If you think nationally, we're about a 13% share. At Target, our longest standing national retail customer, we're over 20% of their category. So we see major share gains, including at Target going forward.
Speaker #4: At Target, our longest-standing national retail customer, we're over 20 percent of their category. So we see major share gains including at Target going forward.
Speaker #4: And it is that combination of leveraging where we have point, but we're not done there with the innovation we have. And we certainly have major opportunity in both lip and mascara and the innovation to help conquest those.
Tarang Amin: And it is that combination of leveraging where we have strengths. I don't think anyone thought we'd have a 22% share in face at some point, but we're not done there with the innovation we have, and we certainly have major opportunity in both lip and mascara and the innovation to help conquest those.
Speaker #4: strengths, I don't think anyone thought we'd have The last piece, you know, I brought it up before, but skincare is a major growth factor for us.
Tarang Amin: The last piece, you know, I brought it up before, but skincare is a major growth factor for us, and we have three brands really, to pursue our aspirations in skincare. And then in terms of the key KPIs for international, I think they're very similar to the KPIs we use in the US. We really take a look from a consumer standpoint, what's the penetration? What's our ranking amongst the key and most desirable consumer sets? So the strength we have in the US amongst Gen Z, Gen Alpha, Millennial, we track that, and we're very pleased with what we're seeing in the markets we enter. Second thing we look at is productivity. What is the productivity in terms of the sales per linear foot that we deliver in?
Tarang Amin: The last piece, you know, I brought it up before, but skincare is a major growth factor for us, and we have three brands really, to pursue our aspirations in skincare. And then in terms of the key KPIs for international, I think they're very similar to the KPIs we use in the US. We really take a look from a consumer standpoint, what's the penetration?
Speaker #4: And we have three brands, really, to pursue our aspirations in skincare. And then, in terms of the key KPIs for International, I think they're U.S.
Speaker #4: We really take a look from penetration? What's our ranking a consumer standpoint. amongst the key and most What's the desirable consumer sets? So the strength we have in the US amongst Gen Z, that.
Tarang Amin: What's our ranking amongst the key and most desirable consumer sets? So the strength we have in the US amongst Gen Z, Gen Alpha, Millennial, we track that, and we're very pleased with what we're seeing in the markets we enter. Second thing we look at is productivity. What is the productivity in terms of the sales per linear foot that we deliver in?
Speaker #4: seeing in the markets we enter, and we're very pleased with what we're—second thing we look at is productivity. What is the productivity in terms of the sales per linear foot that we deliver in?
Speaker #4: And as I mentioned earlier, we're not only the most productive Gen Alpha, Millennial. We track brand here in the US, but we are with our major US, major international retailers—Boots and Superdrug being the two biggest—Shoppers Drug Mart, Walmart Canada.
Tarang Amin: As I mentioned earlier, we're not only the most productive brand here in the US, but we are with our major US, major international retailers, Boots and Superdrug being the two biggest, Shoppers Drug Mart, Walmart Canada. So we look at that. Then I'd say the third are the submetrics by each of our core functional areas. What I'll tell you in summary is we're really pleased overall with our international market. Mandy talked about, "Hey, look, we're currently facing some challenges in the UK, given the promotional environment," but we continue to see very strong build in terms of awareness, overall brand equity ratings. We've heard that some of our competitors are gonna be taking pricing in the UK, so that should help aid the value proposition we have in the UK.
Tarang Amin: As I mentioned earlier, we're not only the most productive brand here in the US, but we are with our major US, major international retailers, Boots and Superdrug being the two biggest, Shoppers Drug Mart, Walmart Canada. So we look at that. Then I'd say the third are the submetrics by each of our core functional areas. What I'll tell you in summary is we're really pleased overall with our international market.
Speaker #4: And so we look at that. And then I'd say the third are the submetrics by each areas. And what I'll tell you in summary is we're really pleased overall with our international market.
Speaker #4: Mandy talked about, "Hey, look, we're currently facing some challenges in the UK given the promotional environment." But we continue to see very strong build in terms of awareness, overall brand equity ratings.
Tarang Amin: Mandy talked about, "Hey, look, we're currently facing some challenges in the UK, given the promotional environment," but we continue to see very strong build in terms of awareness, overall brand equity ratings. We've heard that some of our competitors are gonna be taking pricing in the UK, so that should help aid the value proposition we have in the UK.
Speaker #4: We've heard that some of our competitors are going to be taking pricing in the UK. So that should help aid the value proposition we have in the UK.
Speaker #4: And in Germany, the real strategy I talked about earlier is really building our presence in the countries that we've already seeded. have DM, So being able to Amazon, and Rossmann Germany allows us to put our full marketing model on in that country once you have real presence.
Tarang Amin: And in Germany, the strategy I talked about earlier is really building our presence in the countries that we've already seeded. So being able to have DM, Amazon, and Rossmann Germany allows us to put our full marketing model on in that country once you have real presence. So I'm particularly excited about what we can do in Germany, the largest market in Europe, and we will continue to seed other markets. But all the consumer metrics we're seeing right now are healthy, relative to the time that we've entered each of these countries and each of these retailers. So really encouraged by what we can continue to do, and not only in e.l.f., but as I mentioned before, across the portfolio, e.l.f. Color, e.l.f.
Tarang Amin: And in Germany, the strategy I talked about earlier is really building our presence in the countries that we've already seeded. So being able to have DM, Amazon, and Rossmann Germany allows us to put our full marketing model on in that country once you have real presence.
Speaker #4: So I'm particularly excited about what we can do in Germany the largest market in Europe. And we will continue to seed other markets. But all the consumer metrics we're seeing right now are healthy.
Tarang Amin: So I'm particularly excited about what we can do in Germany, the largest market in Europe, and we will continue to seed other markets. But all the consumer metrics we're seeing right now are healthy, relative to the time that we've entered each of these countries and each of these retailers. So really encouraged by what we can continue to do, and not only in e.l.f., but as I mentioned before, across the portfolio, e.l.f. Color, e.l.f. e.l.f. SKIN, Naturium, and rhode, all have major potential, and we're pleased with the results we're seeing behind them.
Speaker #4: Relative to the time that we've entered, each of these each of So really encouraged by what we can continue to do. And not these countries and each of these retailers.
Speaker #4: only in elf, but as I mentioned before, across the portfolio, elf color, elf skin, Naturium, and road, all have major potential. And we're pleased with the results we're seeing behind them.
Tarang Amin: e.l.f. SKIN, Naturium, and rhode, all have major potential, and we're pleased with the results we're seeing behind them.
Speaker #1: Our next question comes from Anna Lazul from Bank of America. Please go ahead with your question.
Operator: Our next question comes from Anna Lizzul from Bank of America. Please go ahead with your question.
Operator: Our next question comes from Anna Lizzul from Bank of America. Please go ahead with your question.
Speaker #8: Hi, good afternoon. Thanks so much for the question. I wanted to follow up on your marketing spend plans in the second half. Just curious, what drove the decision this year to go back to a Super Bowl ad after not having one last year?
Mandy Fields: Hi, good afternoon. Thanks so much for the question. I wanted to follow up on your marketing spend plans in the second half. Just curious, what drove the decision this year to go back to a Super Bowl ad after not having one last year? And then if we look at fiscal Q4, of course, acknowledging that you have that Super Bowl ad and some distribution gains, this should be, you know, significantly higher marketing spend in fiscal Q3. I wanted to better understand an allocation of what's driving that between these factors. And I know you talked about your EBITDA margin in the second half overall, now expected to be around 19%, which is better than your expectation for the prior quarter. So I wanted to better understand what changed.
Anna Lizzul: Hi, good afternoon. Thanks so much for the question. I wanted to follow up on your marketing spend plans in the second half. Just curious, what drove the decision this year to go back to a Super Bowl ad after not having one last year?
Speaker #8: And then if we look at fiscal Q4, of course, acknowledging that you have that Super Bowl ad and some distribution gains, this should be significantly higher marketing spend in fiscal Q3.
Anna Lizzul: And then if we look at fiscal Q4, of course, acknowledging that you have that Super Bowl ad and some distribution gains, this should be, you know, significantly higher marketing spend in fiscal Q3. I wanted to better understand an allocation of what's driving that between these factors. And I know you talked about your EBITDA margin in the second half overall, now expected to be around 19%, which is better than your expectation for the prior quarter. So I wanted to better understand what changed.
Speaker #8: I wanted to better understand an allocation of what's driving that between these factors. And I know you talked about your EBITDA margin in the second half overall now expected to be around 19 percent, which is better than your expectation for the prior quarter.
Speaker #8: So I wanted to better understand what changed. You did mention that cost shift from fiscal Q3 into fiscal Q4, but it does look like it's overall lower in the second half than you originally expected if you could elaborate on that.
Mandy Fields: You did mention that cost shift from fiscal Q3 into fiscal Q4, but it does look like it's overall lower in the second half than you originally expected, if you could elaborate on that. Thank you.
Anna Lizzul: You did mention that cost shift from fiscal Q3 into fiscal Q4, but it does look like it's overall lower in the second half than you originally expected, if you could elaborate on that. Thank you.
Speaker #8: Thank you.
Speaker #9: Hi, Anna. Sorry about that. And we did have a little technical difficulty over here. So marketing spend in the second half, yeah, we overall for the year, let me take a step back, our targeting 24 to 26 percent.
Tarang Amin: Hi, Anna. Sorry about that. We had a little technical difficulty over here. So marketing spend in the second half, yeah, we, overall, for the year, let me take a step back, are targeting 24% to 26%.
Mandy Fields: Hi, Anna. Sorry about that. We had a little technical difficulty over here. So marketing spend in the second half, yeah, we, overall, for the year, let me take a step back, are targeting 24% to 26%.
Speaker #9: For our marketing spend, that remains unchanged. How the quarters have come together, we did have some timing shifts. You saw the number of campaigns that we've already had as we've started Q4.
Mandy Fields: ... for our marketing spend, so that remains unchanged. How the quarters have come together, we did have some timing shifts. You saw the number of campaigns that we've already had, as we started Q4, and so that is what's driving some of that, marketing spend, heavier in Q4, but really overall for the second half, largely the same. On the Super Bowl or the big game, as we have to call it, you know, we did participate in a way last year. It just wasn't through an ad. And this year, we're gonna do it through streaming on Peacock. We'll also be on Univision. And so again, it's not the big, broad national ad. And then we're also gonna continue to run that for an additional eight weeks as we go through.
Mandy Fields: ... for our marketing spend, so that remains unchanged. How the quarters have come together, we did have some timing shifts. You saw the number of campaigns that we've already had, as we started Q4, and so that is what's driving some of that, marketing spend, heavier in Q4, but really overall for the second half, largely the same.
Speaker #9: And so that marketing spend. Heavier in is what's driving some of that Q4, but really overall for the second half, largely the same. On the Super Bowl or the big game, as we have to call it, you know, we did participate in a way last year.
Mandy Fields: On the Super Bowl or the big game, as we have to call it, you know, we did participate in a way last year. It just wasn't through an ad. And this year, we're gonna do it through streaming on Peacock. We'll also be on Univision. And so again, it's not the big, broad national ad. And then we're also gonna continue to run that for an additional eight weeks as we go through.
Speaker #9: It just wasn't through an ad. And this year we're going to do it through streaming on Peacock. We'll also be on Univision. And so again, it's not ad.
Speaker #9: And then we're also going to continue to run that for an additional eight weeks as we go through. So we'll continue to get some additional hits and eyeballs from that activation as well.
Mandy Fields: So we'll continue to get some additional hits and eyeballs from that activation as well. And so feeling really good about the marketing spend. And then on the SG&A or on the adjusted EBITDA for the second half, like I said, from an adjusted EBITDA margin standpoint, we are seeing that better than we previously outlooked. And really, that's why I'm looking at things on a second-half basis, because we did have some timing shifts on the quarter.
Mandy Fields: So we'll continue to get some additional hits and eyeballs from that activation as well. And so feeling really good about the marketing spend. And then on the SG&A or on the adjusted EBITDA for the second half, like I said, from an adjusted EBITDA margin standpoint, we are seeing that better than we previously outlooked. And really, that's why I'm looking at things on a second-half basis, because we did have some timing shifts on the quarter.
Speaker #9: And so feeling really good about the marketing spend. And then on the SG&A or on the adjusted EBITDA for the second half, like I said, from an adjusted EBITDA margin standpoint, we are seeing that better outlooked.
Speaker #9: than we previously on a second half basis because we did have some timing shifts on the
Speaker #9: quarter. And our next question comes from
Speaker #1: Bonnie Herzog from Goldman Sachs. Please go ahead.
Operator: Our next question comes from Bonnie Herzog from Goldman Sachs. Please go ahead with your question.
Operator: Our next question comes from Bonnie Herzog from Goldman Sachs. Please go ahead with your question.
Speaker #1: ahead with your question. All
Speaker #10: Right. Thank you. Hi, everyone. I actually had a question on your full-year guidance. You raised your net sales guidance at the midpoint by $46 million, but you now expect retail sales will be about $60 to $65 million higher.
[Analyst] (Goldman Sachs): All right, thank you. Hi, everyone. I actually had a question on your full year guidance. You raised your net sales guidance at the midpoint by $46 million, but you now expect Rhode sales will be about $60 to 65 million higher, which does suggest ELF brand growth will now be lower. So could you talk to that and maybe what's changed? I guess, you know, is this outlook conservative or is there something you're seeing, I don't know, with some of the innovation you've rolled out so far, which maybe gives you a little pause?
Bonnie Herzog: All right, thank you. Hi, everyone. I actually had a question on your full year guidance. You raised your net sales guidance at the midpoint by $46 million, but you now expect Rhode sales will be about $60 to 65 million higher, which does suggest ELF brand growth will now be lower. So could you talk to that and maybe what's changed? I guess, you know, is this outlook conservative or is there something you're seeing, I don't know, with some of the innovation you've rolled out so far, which maybe gives you a little pause?
Speaker #10: Which does suggest elf brand growth will now be lower. So could you talk to that and maybe what's changed? I guess, you know, is this outlook conservative or is there something you're seeing?
Speaker #10: I don't know what some of the innovation you've rolled out so far, which maybe gives you a little
Speaker #9: Hi, Bonnie. So I'll take
Speaker #9: that question. So overall, we did raise our guidance. So we're pause. very pleased to be in a position to raise our guidance up to 22 to 23 percent on the full year.
Mandy Fields: Hi, Bonnie. So I'll take that question. So overall, we did raise our guidance, so we're very pleased to be in a position to raise our guidance up to 22% to 23% on the full year. What's implied in that on the e.l.f. brand or, or on an organic basis, is around 2% for the second half, and I'll take you back to the math that we talked about on the call. We're seeing about a 6% global consumption rate right now, and so we're using that, and we're saying 4 points come off from a net sales standpoint, given the pipeline that we have to cycle in the base. So what changed, to your question, is that global consumption rate.
Mandy Fields: Hi, Bonnie. So I'll take that question. So overall, we did raise our guidance, so we're very pleased to be in a position to raise our guidance up to 22% to 23% on the full year. What's implied in that on the e.l.f. brand or, or on an organic basis, is around 2% for the second half, and I'll take you back to the math that we talked about on the call.
Speaker #9: What's implied in that on the elf brand or on an organic basis, is around 2 percent for the second half. And I'll take you back to the math that we talked about on the call.
Speaker #9: We're seeing about a 6% global consumption rate right now. And so we're using that and we're saying 4 points come off from a net sales standpoint, given the pipeline that we have to cycle in the base.
Mandy Fields: We're seeing about a 6% global consumption rate right now, and so we're using that, and we're saying 4 points come off from a net sales standpoint, given the pipeline that we have to cycle in the base. So what changed, to your question, is that global consumption rate.
Speaker #9: So what changed to your question is that global consumption rate. We were seeing that consumption rate closer to 8 percent when we came out with our guidance in November and have since seen that come to around 6 percent.
Mandy Fields: We were seeing that consumption rate closer to 8%, when we came out with our guidance in November and have since seen that come to around 6%. So I would say that would be the key change, as we look at the organic business overall.
Mandy Fields: We were seeing that consumption rate closer to 8%, when we came out with our guidance in November and have since seen that come to around 6%. So I would say that would be the key change, as we look at the organic business overall.
Speaker #9: So I would say that would be the key change as we look at the organic business
Speaker #9: overall. And of course, if that gets better,
Speaker #2: there's some upside. And so we're just using kind of what we're currently seeing right now, but we feel good about the fundamentals.
Tarang Amin: Of course, if that gets better, there's some upside. So we're just using kind of what we're currently seeing right now, but we feel good about the fundamentals.
Filippo Falorni: Of course, if that gets better, there's some upside. So we're just using kind of what we're currently seeing right now, but we feel good about the fundamentals.
Speaker #9: That's right. As Serene mentioned, for spring resets, our still taking place some haven't even started yet. And so that will allow us to get a real read on how spring innovation is performing.
Mandy Fields: That's right. As Seren mentioned, our spring resets are still taking place. Some haven't even started yet, and so that will allow us to get a real read on how spring innovation is performing. And so that could be a potential opportunity as we look forward.
Mandy Fields: That's right. As Seren mentioned, our spring resets are still taking place. Some haven't even started yet, and so that will allow us to get a real read on how spring innovation is performing. And so that could be a potential opportunity as we look forward.
Speaker #9: And so that could be a potential opportunity as we look forward.
Speaker #1: Our next question comes from Filippo Filorni from City. Please go ahead with your
Operator: Our next question comes from Filippo Falorni from Citi. Please go ahead with your question.
Operator: Our next question comes from Filippo Falorni from Citi. Please go ahead with your question.
Speaker #1: question. Hey, good afternoon,
Speaker #11: everyone. So for Q3, can you help us bridge the gap in terms of the organic performance in the US relative growth that we see in track channel data?
[Analyst] (Citi): Hey, good afternoon, everyone. So for Q3, can you help us bridge the gap in terms of the organic performance in the US, relative to the strong double-digit consumption growth that we see in track channel data? I thought that pipeline cycling was more Q2, Q4, so maybe was there a bigger impact in Q3 than previously expected that dropped that gap? And then looking forward into Q4, can you give us a sense of what you expect in terms of US consumption within that 6% global consumption? Should we expect US to be above that, given some of the international weakness that you mentioned? And when do you think we should see in your consumption data some of the benefits from the innovation and the shelf space gains that you mentioned earlier in the call?
Filippo Falorni: Hey, good afternoon, everyone. So for Q3, can you help us bridge the gap in terms of the organic performance in the US, relative to the strong double-digit consumption growth that we see in track channel data? I thought that pipeline cycling was more Q2, Q4, so maybe was there a bigger impact in Q3 than previously expected that dropped that gap?
Speaker #11: I thought that pipeline cycling was more skewed to Q4, so maybe was there a bigger impact in Q3 than previously expected? That dropped that gap.
Speaker #11: And then looking forward into Q4, can you give us a sense of what you're expecting in to the strong double-digit consumption within the 6 percent global consumption?
Filippo Falorni: And then looking forward into Q4, can you give us a sense of what you expect in terms of US consumption within that 6% global consumption? Should we expect US to be above that, given some of the international weakness that you mentioned? And when do you think we should see in your consumption data some of the benefits from the innovation and the shelf space gains that you mentioned earlier in the call? Thank you so much.
Speaker #11: Should we expect US to be above that given some of the international weakness that you mentioned? And when do you think we should see in your consumption data some of the benefits from the innovation and the shelf space gains that you mentioned earlier in the call?
Speaker #11: Thank you so
Speaker #11: much. Hi,
[Analyst] (Citi): Thank you so much.
Speaker #9: Filippo. So for Q3, we talked about, you know, we're looking at things in the second half in aggregate, which I think is a better way to look at things because in Q3, we did have some timing of shipment shift over into Q4.
Mandy Fields: Hi, Filippo. So for Q3, we talked about, you know, we, we're looking at things in the second half in aggregate, which I think is a better way to look at things, because in Q3, we did have some timing of shipment shift over into Q4, and so that's why I keep anchoring back to the second half. Originally, we had expected Q4 to be a negative quarter for us, but now we're outlooking that to be flat to up 2% would be implied by our guidance. So that's a good thing, but that does imply some, some shipments shifted from Q3 into Q4. In addition, as I just spoke about, to Bonnie's question on the global consumption rate, we're seeing that at around 6% versus 8% previously. We haven't broken out what to expect from a US versus international.
Mandy Fields: Hi, Filippo. So for Q3, we talked about, you know, we, we're looking at things in the second half in aggregate, which I think is a better way to look at things, because in Q3, we did have some timing of shipment shift over into Q4, and so that's why I keep anchoring back to the second half.
Speaker #9: And so that's why I keep anchoring back to the second half. Originally, we had expected Q4 to be a negative quarter for us, but now we're outlooking that to be flat to up 2 percent would be implied by our guidance.
Mandy Fields: Originally, we had expected Q4 to be a negative quarter for us, but now we're outlooking that to be flat to up 2% would be implied by our guidance. So that's a good thing, but that does imply some, some shipments shifted from Q3 into Q4. In addition, as I just spoke about, to Bonnie's question on the global consumption rate, we're seeing that at around 6% versus 8% previously. We haven't broken out what to expect from a US versus international.
Speaker #9: So that's a good thing, but that does imply some shipments shifted from Q3 into Q4. And in addition, as I just spoke about to Bonnie's question on the global consumption rate, we're seeing that at around 6 percent versus 8 percent previously.
Speaker #9: We haven't broken out what to expect from a US versus international. In fact, we really want to anchor back to the total level on some of these numbers because there are so many ins and outs with looking at US and international, road versus organic.
Mandy Fields: In fact, we really wanna anchor back to the total level, on some of these numbers because there are so many ins and outs with you-- looking at US and international, at Rhode versus organic. We really want to anchor back to what we're seeing overall as a total company, which is very strong momentum. We just reported 38% net sales growth quarter and are outlooking for the second half, 31% to 33% net sales growth, which is quite strong in this backdrop.
Mandy Fields: In fact, we really wanna anchor back to the total level, on some of these numbers because there are so many ins and outs with you-- looking at US and international, at Rhode versus organic. We really want to anchor back to what we're seeing overall as a total company, which is very strong momentum. We just reported 38% net sales growth quarter and are outlooking for the second half, 31% to 33% net sales growth, which is quite strong in this backdrop.
Speaker #9: We really want to anchor back to what we're seeing overall as a total company which is very strong momentum, which is reported at 38 percent net sales growth quarter.
Speaker #9: And our outlooking for the second half, 31 to 33 percent net sales growth, which is quite strong in this backdrop.
Speaker #1: Our next question comes from.
Speaker #9: Sorry. Sorry, I just wanted to finish up really both questions on consumption and innovation and when do you start to see those see any benefit from those?
Operator: Our next question comes from-
Operator: Our next question comes from-
[Analyst] (Goldman Sachs): Sorry.
Bonnie Herzog: Sorry.
Mandy Fields: ... I'm sorry, I just wanted to finish up with those questions on consumption and innovation, and when do you start to see those things marry up, or see any benefit from those? And the spring innovation, like we were saying, resets are starting now. Some haven't started yet. So I think by the time you get to the beginning of March, you should start to see some of that out in consumption data as we go through.
Mandy Fields: ... I'm sorry, I just wanted to finish up with those questions on consumption and innovation, and when do you start to see those things marry up, or see any benefit from those? And the spring innovation, like we were saying, resets are starting now. Some haven't started yet. So I think by the time you get to the beginning of March, you should start to see some of that out in consumption data as we go through.
Speaker #9: And the spring innovation, like we were saying, resets are starting now. Some haven't started yet. So I think by the time you get to the beginning of March, you should start to see some of that out in consumption data as we go
Speaker #9: through. And our next question comes from
Speaker #1: Anna Andriva from Piper Sandler. Please go ahead with your question.
Operator: Our next question comes from Anna Andreeva from Piper Sandler. Please go ahead with your question.
Operator: Our next question comes from Anna Andreeva from Piper Sandler. Please go ahead with your question.
Speaker #1: question. Great.
Speaker #10: Thank you so much for taking our question. We have a couple. You guys talked about softness in the UK for e.l.f. organic. Can you talk about, did that get worse this quarter?
[Analyst] (Piper Sandler): Great. Thank you so much for taking our question. We have a couple. You guys talked about softness in the UK for e.l.f. Cosmetics. Can you talk about, did that get worse this quarter? I think that's your biggest international market. So could you talk about some of the initiatives there to return back to growth? And then just to follow up on rhode, congrats. I mean, really great results and understanding some of the investment is pretty necessary, and the pipeline of innovation there is different than at core. But can you talk about where are you in the investment cycle at rhode? Should we think that's something that's continuing into 2027, until you've kind of lapped owning the business in the back half? Thank you.
Anna Andreeva: Great. Thank you so much for taking our question. We have a couple. You guys talked about softness in the UK for e.l.f. Cosmetics. Can you talk about, did that get worse this quarter? I think that's your biggest international market. So could you talk about some of the initiatives there to return back to growth?
Speaker #10: I think that's your biggest international market. So could you talk about some of the initiatives there to return back to growth? And then just to follow up on road, congrats.
Anna Andreeva: And then just to follow up on rhode, congrats. I mean, really great results and understanding some of the investment is pretty necessary, and the pipeline of innovation there is different than at core. But can you talk about where are you in the investment cycle at rhode? Should we think that's something that's continuing into 2027, until you've kind of lapped owning the business in the back half? Thank you.
Speaker #10: I mean, really great results. And understanding some of the investment is pretty necessary. And the pipeline of innovation there is different than at core.
Speaker #10: But can you talk about where you are in the investment cycle at e.l.f.? Should we think that's something that's continuing into '27, until you've kind of left owning the business in the back half?
Speaker #10: Thank you.
Speaker #2: So hi, Anna. This is Serene. So starting with softness in the UK, we have seen the UK have a higher promotional environment than has been normal.
Tarang Amin: So, hi, Anna, this is Tarang. So starting with softness in the UK, we have seen the UK have a higher promotional environment than has been normal, and so that certainly has impacted us. In terms of our strategy, I think it's threefold. One is reinforce our value proposition. As I mentioned earlier, a number of our competitors have announced they typically take pricing in the spring, so we'll see how that pricing plays out in terms of how that helps our overall value proposition. Second, we have a new leader for EMEA, a very experienced GM, and the focus really is building out depth in our existing markets. And so there's, you know, it's been quite a while since we've done awareness advertising in the UK, some other levers within our overall marketing engine that will apply. And certainly, innovation always plays every single geography we're at.
Tarang Amin: So, hi, Anna, this is Tarang. So starting with softness in the UK, we have seen the UK have a higher promotional environment than has been normal, and so that certainly has impacted us. In terms of our strategy, I think it's threefold. One is reinforce our value proposition. As I mentioned earlier, a number of our competitors have announced they typically take pricing in the spring, so we'll see how that pricing plays out in terms of how that helps our overall value proposition.
Speaker #2: And so that certainly is impacted us. In terms of our strategy, I think it's threefold. One is reinforce our value proposition, as I mentioned earlier, a number of our competitors have announced they typically take pricing in the spring.
Speaker #2: So we'll see how that pricing plays out in terms of how that helps our overall value proposition. Second, we have a new leader for EMEA, a very experienced GM, and the focus really is building out depth in our existing markets.
Tarang Amin: Second, we have a new leader for EMEA, a very experienced GM, and the focus really is building out depth in our existing markets. And so there's, you know, it's been quite a while since we've done awareness advertising in the UK, some other levers within our overall marketing engine that will apply. And certainly, innovation always plays every single geography we're at.
Speaker #2: And so there is, you know, it's been quite a while since we've done awareness advertising in the UK. Some of their levers within our overall marketing engine that will apply.
Speaker #2: And certainly, innovation always plays every single geography route. So just as we see promising signs in our spring, innovation in 2025, we believe that will play out in our international markets, including the UK.
Tarang Amin: So just as we see promising signs in our spring innovation in 2025, we believe that will play out in our international markets, including the UK. So there'll be, I'd say, these three things, you know, greater focus on the market, new leadership, and then being able to really leverage both our innovation and marketing. We are confident of our position in the UK longer term. If I look at over the last, as I mentioned earlier, the last 5-year CAGR for international at 55%, 60% of that was driven by the UK and Canada. So we still have much further to go in the UK and in Canada, where we continue to have momentum.
Tarang Amin: So just as we see promising signs in our spring innovation in 2025, we believe that will play out in our international markets, including the UK. So there'll be, I'd say, these three things, you know, greater focus on the market, new leadership, and then being able to really leverage both our innovation and marketing.
Speaker #2: So those would be the, I'd say the three things, you know, greater focus on the market, new leadership, and then being able to really leverage both our innovation and marketing.
Speaker #2: We are confident of our position in the UK longer term. If I look at over the last, as I mentioned earlier, the last five-year CAGR for international at 55 percent, 60 percent of that was driven by the UK and Canada.
Tarang Amin: We are confident of our position in the UK longer term. If I look at over the last, as I mentioned earlier, the last 5-year CAGR for international at 55%, 60% of that was driven by the UK and Canada. So we still have much further to go in the UK and in Canada, where we continue to have momentum.
Speaker #2: So we still have much further to go. In the UK and in Canada, where we continue to have momentum. And then on your second question, in terms of road, I would say where we are in the investment pipeline, first of all, the team has done a phenomenal job being able to keep up with the tremendous demand that we're seeing.
Tarang Amin: And then on your second question, in terms of rhode, I would say where we are in the investment pipeline. First of all, the team has done a phenomenal job, being able to keep up with the tremendous demand that we're seeing for rhode. We're continuing to work with Sephora to make sure that in-stocks are right. I mean, the brand is just so outsold anything anyone's expecting, that the team has done really a Herculean job, really keeping up from a supply standpoint, making the right investments. And so we have good capacity to be able to continue to do that. It's more of a forecasting thing relative to the demand we saw, and we'll get better there.
Tarang Amin: And then on your second question, in terms of rhode, I would say where we are in the investment pipeline. First of all, the team has done a phenomenal job, being able to keep up with the tremendous demand that we're seeing for rhode. We're continuing to work with Sephora to make sure that in-stocks are right.
Speaker #2: For road, we're continuing to work with Sephora to make sure that in-stocks are right. I mean, the brand has just so outsold anything anyone's expecting that the team has done really a Herculean job really keeping up from a supply standpoint and making the right investments.
Tarang Amin: I mean, the brand is just so outsold anything anyone's expecting, that the team has done really a Herculean job, really keeping up from a supply standpoint, making the right investments. And so we have good capacity to be able to continue to do that. It's more of a forecasting thing relative to the demand we saw, and we'll get better there.
Speaker #2: And so we have good capacity to be able to continue to do that. relative to the demand we saw, and we'll get It's more of a forecasting thing better there.
Speaker #2: In terms of other investments, we're making, you know, we mentioned when we acquired the brand, one of the early investments we made is field sales support for Sephora and really making sure that that launch went off without a hitch and that was one.
Tarang Amin: In terms of other investments we're making, you know, we mentioned when we acquired the brand, one of the early investments we made is field sales support for Sephora and really making sure that that launch went off without a hitch, and that was one. Over time, we talked also during the time of acquisition; we would want to invest more in marketing and the team. We've continued to build out the team, particularly given our global aspirations for the brand. And so I feel good in terms of where we are on the cadence of both the rollout as well as the investments we're making. And in some respects, it's very much pay as you go. I mean, the rhode margins are pretty phenomenal, and we'll continue to invest in it, as we mentioned during acquisition.
Tarang Amin: In terms of other investments we're making, you know, we mentioned when we acquired the brand, one of the early investments we made is field sales support for Sephora and really making sure that that launch went off without a hitch, and that was one. Over time, we talked also during the time of acquisition; we would want to invest more in marketing and the team.
Speaker #2: Over time, we talked also during the time of acquisition, we would want to invest more in marketing and the team. We've continued to build out the team, particularly given our global aspirations for the brand.
Tarang Amin: We've continued to build out the team, particularly given our global aspirations for the brand. And so I feel good in terms of where we are on the cadence of both the rollout as well as the investments we're making. And in some respects, it's very much pay as you go. I mean, the rhode margins are pretty phenomenal, and we'll continue to invest in it, as we mentioned during acquisition. I don't know, Mandy, if you have anything else to add there.
Speaker #2: And so I feel good in terms of where we are on the cadence of both the rollout as well as the investments we're making.
Speaker #2: And in some respects, it's very much pay as you go. I mean, the road margins are pretty phenomenal, and we'll continue to invest in it as we mentioned during acquisition.
Speaker #2: I don't know, Mandy, if you have anything else to add there.
Tarang Amin: I don't know, Mandy, if you have anything else to add there.
Speaker #10: That's good.
Mandy Fields: That's good.
Mandy Fields: That's good.
Speaker #1: Our next question comes from Susan Anderson from Canaccord Annuity. Please go ahead with your question.
Operator: Our next question comes from Susan Anderson from Canaccord Genuity. Please go ahead with your question.
Operator: Our next question comes from Susan Anderson from Canaccord Genuity. Please go ahead with your question.
Speaker #10: Hi, good evening. Thanks for taking my questions here. I guess maybe can you give us an update just on tariffs when you'll start the cycle, the impact there, and then just curious, have you been able to fully mitigate the tariff impact with the price increase and then other efforts?
[Company Representative] (e.l.f. Beauty): Hi, good evening. Thanks for taking my questions here. I guess, maybe can you give us an update just on tariffs, when you'll start to cycle the impact there? And then, just curious, have you been able to fully mitigate the tariff impact with the price increase and then other efforts? And then also, maybe, if you could talk about, I think on the last call, you talked about holding back some inventory to some retailers that haven't changed their pricing. I guess, I assume that's been resolved and you're shipping to them now, but I guess I was curious if there was any catch-up in the quarter there as well. Thanks.
Susan Anderson: Hi, good evening. Thanks for taking my questions here. I guess, maybe can you give us an update just on tariffs, when you'll start to cycle the impact there? And then, just curious, have you been able to fully mitigate the tariff impact with the price increase and then other efforts?
Speaker #10: And then also, maybe if you could talk about, I think on the last call you talked about holding back some inventory to some retailers that haven't changed their pricing.
Susan Anderson: And then also, maybe, if you could talk about, I think on the last call, you talked about holding back some inventory to some retailers that haven't changed their pricing. I guess, I assume that's been resolved and you're shipping to them now, but I guess I was curious if there was any catch-up in the quarter there as well. Thanks.
Speaker #10: I guess I assume that's been resolved and your shipping to them now, but I guess I was curious if there was any catch-up in the quarter there as well.
Speaker #10: Thanks.
Speaker #9: Yeah. Hi,
Speaker #9: Susan. So on the tariff front, it's been pretty quiet since the November 10th change in tariffs. So the tariff rate is now at 45 percent.
Mandy Fields: Yeah. Hi, Susan. So on the tariff front, it's been pretty quiet since the 10 November change in tariffs. So the tariff rate is now at 45%. As you know, it has been as high as 170% earlier in the fiscal year, and so we really haven't had any changes since that point in time. And if it remains at 45%, that becomes a little bit of a tailwind for us as we get into fiscal 2027, given that we were paying those higher rates as we started the year. And so that's, that's the latest on the tariff front. On a shipment standpoint, yeah, and pricing, that was fully resolved. That was fully resolved as we exited Q2, and so no further updates on that front.
Mandy Fields: Yeah. Hi, Susan. So on the tariff front, it's been pretty quiet since the 10 November change in tariffs. So the tariff rate is now at 45%. As you know, it has been as high as 170% earlier in the fiscal year, and so we really haven't had any changes since that point in time.
Speaker #9: As you know, it has been as high as 170 percent earlier in the fiscal year. And so we really haven't had any changes since that point in time.
Speaker #9: And if it remains at 45 percent, that becomes a little bit of a tailwind for us as we get into fiscal '27, given that we were paying those higher rates as we started the year.
Mandy Fields: And if it remains at 45%, that becomes a little bit of a tailwind for us as we get into fiscal 2027, given that we were paying those higher rates as we started the year. And so that's, that's the latest on the tariff front. On a shipment standpoint, yeah, and pricing, that was fully resolved. That was fully resolved as we exited Q2, and so no further updates on that front.
Speaker #9: And so, that's the latest on the tariff front. On a shipment standpoint, yes, and pricing, that was fully resolved. That was fully resolved as we exited the second quarter.
Speaker #9: And so, no further updates on that.
Speaker #1: Our next question comes from Steve Powers from Deutsche Bank. Please go ahead with your question.
Operator: Our next question comes from Steve Powers from Deutsche Bank. Please go ahead with your question.
Operator: Our next question comes from Steve Powers from Deutsche Bank. Please go ahead with your question.
Speaker #1: question. Mandy, thanks so
Speaker #11: Much. Good evening. Mandy, one of the areas you mentioned as a driver of higher SG&A spending in the fourth quarter is spending on that incremental space expansion.
[Analyst] (Deutsche Bank): Hey, thanks so much. Good evening. Mandy, one of the areas you mentioned as a driver of higher SG&A spending in Q4 is spending on that incremental space expansion. I just wanted to dig in there a little bit, juxtaposed against the 4-point top line shipment headwinds you framed for the back half and in Q4. I guess, as you step up that spending on expanded space, is the implication that that's, you know, that 4-point headwind is net of that incremental space expansion? Is the implication alternatively, that you're gonna spend on organic space expansion, but you won't realize any revenue gains on that until we get into fiscal 2027, beyond Q4?
Steve Powers: Hey, thanks so much. Good evening. Mandy, one of the areas you mentioned as a driver of higher SG&A spending in Q4 is spending on that incremental space expansion. I just wanted to dig in there a little bit, juxtaposed against the 4-point top line shipment headwinds you framed for the back half and in Q4.
Speaker #11: I just wanted to dig in there a little bit, juxtapose against the 4-point top for the back half and then the fourth quarter. I guess as you step up that spending on expanded space, is the implication that that's that 4-point headwind is net of that incremental space expansion?
Steve Powers: I guess, as you step up that spending on expanded space, is the implication that that's, you know, that 4-point headwind is net of that incremental space expansion? Is the implication alternatively, that you're gonna spend on organic space expansion, but you won't realize any revenue gains on that until we get into fiscal 2027, beyond Q4?
Speaker #11: Is the implication alternatively that you're going to spend on organic space expansion, but you won't realize any revenue gains on that until we get into fiscal '27 beyond the fourth quarter?
Speaker #11: Or what you're saying is you're spending more on space expansion behind road, which would be, you know, inorganic. Where is that spending and when is the return on that spending likely to manifest in the top line, I guess is my ultimate question.
[Analyst] (Deutsche Bank): Or, are what you're saying is you're spending more on space expansion behind rhode, which would be, you know, inorganic. Where is that spending, and when is the return on that spending likely to manifest on the top line? I guess is my, my ultimate question. Thank you.
Steve Powers: Or, are what you're saying is you're spending more on space expansion behind rhode, which would be, you know, inorganic. Where is that spending, and when is the return on that spending likely to manifest on the top line? I guess is my, my ultimate question. Thank you.
Speaker #11: Thank
Speaker #11: you. Yep.
Speaker #9: So maybe let me start with the 4-point headwind. That is a net number. So that is net of any new space expansion—net 4 is the overall impact.
Mandy Fields: Yeah. So maybe let me start with the 4-point headwind. That is a net number, so that is net of any new space expansion. Net 4 is the overall impact. The what we're not—what we're cycling, plus any new that we have. And so when we talk about space spend on space expansion, it really comes in two varieties. One is on incremental space that we're currently getting. So that would include Rhode and like the space expansion that we talked about with Ulta and different things that we noted on the call. And then there's also just refreshed spending that happens on space that you have on an existing visual merchandising fixturing display costs that happen with the spring resets.
Mandy Fields: Yeah. So maybe let me start with the 4-point headwind. That is a net number, so that is net of any new space expansion. Net 4 is the overall impact. The what we're not—what we're cycling, plus any new that we have. And so when we talk about space spend on space expansion, it really comes in two varieties.
Speaker #9: What we're cycling plus any new that we have. And so when we talk about space spend on space expansion, it really comes in two varieties.
Speaker #9: One is on incremental space that we're currently getting, so that would include road and the space expansion that we talked about with Ulta, and different things that we noted on the call.
Mandy Fields: One is on incremental space that we're currently getting. So that would include Rhode and like the space expansion that we talked about with Ulta and different things that we noted on the call. And then there's also just refreshed spending that happens on space that you have on an existing visual merchandising fixturing display costs that happen with the spring resets. And so, all of that is gonna kind of fall into that space spend that we're covering with that comment.
Speaker #9: And then there's also just refreshed spending that happens on space that you have on an existing visual merchandising fixturing display—costs that happen with the spring resets.
Speaker #9: And so all of that is going to kind of fall into that space spend that we're covering with that.
Mandy Fields: And so, all of that is gonna kind of fall into that space spend that we're covering with that comment.
Speaker #9: comment. Yeah.
Speaker #10: And I'll add, historically, the payout has been really good. If you think of, you know, we're the Target example of—we started at four feet, we're now at 20 feet at Target.
Tarang Amin: I'd add, historically, the payout has been really good. If you think of, you know, look, the Target example of, we started at 4 feet, we're now at 20 feet at Target. Number one position, with over 20% of their category. Those incremental expenses over the years, from a retailer standpoint, have paid out really well. I can point the same across each of our customers. Having said that, we do believe there's an opportunity to be more efficient with some of that spend. I think particularly given how much expansion we've had, a lot of times when you're kind of trying to meet an expansion goal and kind of sprinting towards it, that spend can be higher than I think what we could optimize in the US, particularly internationally.
Tarang Amin: I'd add, historically, the payout has been really good. If you think of, you know, look, the Target example of, we started at 4 feet, we're now at 20 feet at Target. Number one position, with over 20% of their category. Those incremental expenses over the years, from a retailer standpoint, have paid out really well. I can point the same across each of our customers.
Speaker #10: Number one position with over 20 percent of their category. Those incremental expenses over the years from a retailer standpoint have paid out really well.
Speaker #10: I can point the same across each of our customers. Having said that, we do believe there's an opportunity to be more efficient with some of that spend.
Tarang Amin: Having said that, we do believe there's an opportunity to be more efficient with some of that spend. I think particularly given how much expansion we've had, a lot of times when you're kind of trying to meet an expansion goal and kind of sprinting towards it, that spend can be higher than I think what we could optimize in the US, particularly internationally.
Speaker #10: I think particularly given how much expansion we've had, a lot of times when you're kind of trying to meet an expansion goal and kind of sprinting towards it, that spend can be higher than I think what we could optimize in the US, particularly internationally.
Speaker #10: I think some of the international space expansion has come at a higher cost. And as we look at it, we believe that's somewhere we can get a little bit more efficient as we go forward, regardless of kind of the overall.
Tarang Amin: I think some of the international space expansion has come at a higher cost, and as we look at it, we believe that's somewhere we can get a little bit more efficient as we go forward, regardless of kind of the overall brand.
Tarang Amin: I think some of the international space expansion has come at a higher cost, and as we look at it, we believe that's somewhere we can get a little bit more efficient as we go forward, regardless of kind of the overall brand.
Speaker #10: brand. And with that, we'll
Speaker #1: be concluding today's question and answer session. I'd like to turn the floor over to Tarang Amin for any closing
Operator: With that, we'll be concluding today's question and answer session. I'd like to turn the floor over to Tarang Amin for any closing remarks.
Operator: With that, we'll be concluding today's question and answer session. I'd like to turn the floor over to Tarang Amin for any closing remarks.
Speaker #1: remarks. Well, thank you for joining us
Speaker #10: Today, as I said, I'm really proud of the incredible team we have at e.l.f. for delivering another quarter of consistent, category-leading growth. We look forward to seeing some of you at the CAGNY Conference in a few weeks and speaking with you in May when we'll discuss our fourth quarter and full year results.
Tarang Amin: Well, thank you for joining us today. As I said, I'm really proud of the incredible team we have at e.l.f. for delivering another quarter of consistent category-leading growth. We look forward to seeing some of you at the CAGNY Conference in a few weeks and speaking with you in May, when we'll discuss our fourth quarter and full year results. Thank you, and be well.
Tarang Amin: Well, thank you for joining us today. As I said, I'm really proud of the incredible team we have at e.l.f. for delivering another quarter of consistent category-leading growth. We look forward to seeing some of you at the CAGNY Conference in a few weeks and speaking with you in May, when we'll discuss our fourth quarter and full year results. Thank you, and be well.
Speaker #10: Thank you and be well.
Speaker #1: with that, ladies and gentlemen, we'll be concluding today's And conference call and presentation. We do thank you for joining. You may now disconnect your lines.
Operator: With that, ladies and gentlemen, we'll be concluding today's conference call and presentation. We do thank you for joining. You may now disconnect your lines.
Operator: With that, ladies and gentlemen, we'll be concluding today's conference call and presentation. We do thank you for joining. You may now disconnect your lines.
[Company Representative] (e.l.f. Beauty): Going in the club that nobody knows. I'm trying tonight. No, I don't give a damn, baby. Damn, baby, roll your eyes. I fix my eyes...
