e.l.f. Beauty, Inc. reported its financial results for the second quarter of fiscal 2026, revealing a net sales increase of 14% to $343.9 million, compared to $301.1 million in the same period last year. The company's gross profit also rose by 12% to $238.9 million, although the gross margin decreased to 69% from 71% due to increased tariffs and lower sales volume. For the six months ending September 30, 2025, net sales reached $697.7 million, up 12% from $625.6 million in the prior year, driven by growth in both retail and e-commerce channels.
The company experienced a significant increase in selling, general, and administrative (SG&A) expenses, which rose 24% to $231.1 million for the quarter, primarily due to higher marketing and distribution costs. Operating income fell to $7.7 million from $27.9 million a year earlier, while net income decreased to $3.0 million from $19.0 million. The decline in profitability was attributed to increased interest expenses and acquisition-related costs, particularly from the recent acquisition of the lifestyle beauty brand rhode for $896.5 million, which was finalized on August 5, 2025.
In terms of operational metrics, e.l.f. Beauty's customer engagement has shown positive trends, with a notable 39% increase in e-commerce sales. The company has also expanded its geographic footprint, with significant sales growth in both domestic and international markets. As of September 30, 2025, the company reported a total of 59.6 million shares outstanding, reflecting its ongoing commitment to shareholder value through potential stock repurchase programs, although no shares were repurchased during the quarter.
Looking ahead, e.l.f. Beauty remains focused on integrating rhode into its operations and leveraging synergies to enhance its product offerings. The company anticipates that the acquisition will contribute positively to its growth strategy, particularly in the skincare segment. However, management acknowledged the challenges posed by ongoing market conditions, including inflationary pressures and evolving regulatory landscapes, which could impact future performance. The company is committed to navigating these challenges while continuing to innovate and expand its product lines to meet consumer demands.
About e.l.f. Beauty, Inc.
e.l.f. Beauty, Inc. is a multi-brand beauty company offering inclusive, cruelty-free, vegan cosmetics and skincare products. Its core brands—e.l.f. Cosmetics, e.l.f. SKIN, Naturium, Well People, and Keys Soulcare—serve global markets through retail and e-commerce channels. The company emphasizes innovation, affordability, and sustainability, leveraging digital marketing and direct-to-consumer sales to disrupt industry norms and connect with diverse, value-conscious consumers.
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