What changed
Net sales up 51% to $520.8M (about 35% organic); $1 price cuts on about 10% of units funded by tariff refunds; FY27 growth outlook raised to 22% to 24%
When
Fiscal Q2 2027, the quarter ended September 30, 2026, reported November 4, 2026
Who it affects
e.l.f. Beauty (e.l.f. Cosmetics, e.l.f. Skin, rhode, Naturium), CEO Tarang Amin, CFO Mandy Fields
What to do
Brands with IEEPA refunds should decide now whether to bank them or test price on a small share of SKUs before Q1

Key takeaways

  • e.l.f. Beauty sales rose 51% to $520.8M in the September quarter, about 35% organic, and the full-year outlook rose to 22% to 24% growth.
  • It used about $52M of tariff refunds to cut $1 off about 10% of units and to fund more marketing, rather than banking the money.
  • e.l.f. ranks number one in cosmetics on Amazon and number two on TikTok Shop; test a price cut on a few SKUs only after working out break-even lift.

e.l.f. Beauty, fiscal 2027 so far

  1. rhode deal annualizes, organic and reported growth converge

  2. Q2 ends: $52M of refunds received in the half

  3. Elf Pop fragrance launches on Amazon and TikTok Shop only

  4. Sales up 51%, outlook raised to 22% to 24%

  5. Refund reinvested, EBITDA margin guided to low teens

The numbers e.l.f. reported

Net sales were $520.8 million against $343.9 million a year earlier, per the company's SEC filing. CNBC said analysts surveyed by LSEG expected $470.3 million and adjusted earnings of $0.60 a share; e.l.f. delivered $1.21. GAAP net income was $30.0 million, or $0.50 a share, up from $3.0 million. Adjusted EBITDA rose 86% to $123.4 million.

The 51% includes rhode, the brand e.l.f. bought in 2025. CFO Mandy Fields said on the call that organic sales grew about 35% and rhode added about 16 points, in the one month before the deal annualized on August 5. She also said unit volume added 31 points and price and mix about 20. US sales rose 25% and international sales 165%. The company now guides fiscal 2027 net sales of $2.003 billion to $2.029 billion, organic growth of 9% to 11%, and second-half growth of 7% to 10%.

Q2 fiscal 2027 at a glance

$520.8MNet sales, up 51%
35%Organic growth
71%Gross margin
21%Marketing as % of sales
Source: e.l.f. Beauty SEC filing and earnings call, November 4, 2026

What it did with the tariff refund

Fields said e.l.f. received $52 million of tariff refunds in the first half; CNBC reported the company expects around $55 million for the year. Instead of keeping it as profit, the company says it will fully reinvest it, a portion into pricing and the majority into marketing and digital, mostly in the second half. Amin told CNBC that meant cutting about 10% of units by $1, and that the cut produced strong unit momentum.

The refund shows up in the margin only a little in this quarter: gross margin was about 71%, up roughly 160 basis points, of which about 30 came from refunds. For the half year the refund lifted gross margin by about 520 basis points. Management guided second-half adjusted EBITDA margin to the low teens, because the reinvested money and marketing shifted out of Q2 land then. Marketing and digital spend was 21% of sales in the quarter, against 23% a year earlier, and is expected at the high end of 23% to 25% for the year.

Amazon and TikTok Shop: what e.l.f. said

Amin said that in the US, e.l.f. was both the number one cosmetics brand on Amazon and the most searched cosmetics brand there. On TikTok Shop, e.l.f. Cosmetics climbed to number two in cosmetics, and CNBC reported it is the most searched brand on the platform. Connected commerce was 31% of the company's consumption in the quarter, and its new Elf Pop fragrance line launched in October only on Amazon and TikTok Shop.

The company did not give Amazon or TikTok Shop sales growth rates, so treat the rankings as position, not size. The useful signal is that a brand born in mass retail now uses the two marketplaces as its launch pad for a new category, then measures itself by search share. Brands watching the same channels can follow the TikTok Shop news desk and our ecommerce marketplace news coverage for the rest of earnings season.

So what: when a $1 cut pays for itself

A price cut only grows profit if units rise faster than the margin you give away. The math is simple to run. These numbers are illustrative, not e.l.f.'s. Take a $10 item with a 70% gross margin, so $7.00 of gross profit per unit. Cut it to $9 and the gross profit falls to $6.00, so you need about 17% more units just to make the same gross profit dollars. On Amazon, the referral fee falls with price, but FBA fees do not, so a seller's break-even lift is usually higher than a retailer's.

e.l.f. did this on a slice of its range, not all of it, and with money it had not counted on. That is the copyable part: a refund is a one-off, so using it to test elasticity on 10% of SKUs costs little if the test fails and tells you where price is the lever if it works.

Worked example for an Amazon seller

Illustrative numbers. A beauty seller has a $14 serum with $3.50 product cost, a 15% referral fee of $2.10 and a $3.90 FBA fee, leaving $4.50 contribution before ads. At $13 the referral fee drops to $1.95, so contribution is $3.65, 19% lower, and the seller needs about 23% more units to stand still. If the serum sells 1,000 units a month, the test needs about 1,233 units at the new price, with ad spend held flat, to break even.

If the seller received a tariff refund of $6,000, running the $1 cut for a month on this SKU costs at most about $850 in lost contribution if units do not move at all. That is the price of the answer. Our Amazon pricing strategy guide covers how to read the result against Buy Box and conversion data.

What brands should do this quarter

  • Finance lead: confirm how much IEEPA refund you have received or expect, and decide in writing what share goes to price, marketing or cash. Metric: refund dollars allocated by December 1.
  • Brand manager: pick 5% to 10% of SKUs with the most units and the cleanest margin, and cut price $1 or about 10% for four weeks in Seller Central, leaving ads unchanged. Metric: units per day and conversion rate versus the four weeks before.
  • Analyst: work out the break-even unit lift for each test SKU after referral and FBA fees, before the test starts. Metric: actual lift versus break-even lift at week four.
  • Ads lead: check share of search for your brand name and top category terms in Brand Analytics, the measure e.l.f. itself quoted. Metric: search query share for the top 10 terms, week over week.
  • Owner: keep cuts that beat break-even and reverse those that do not before Q1, and ask the free Amazon audit team to sanity-check fees and margins first. Metric: contribution dollars per SKU, not revenue.

Before you cut price $1

  • Know your refund amount
  • Pick 5% to 10% of SKUs
  • Work out break-even unit lift
  • Hold ad spend flat
  • Run four weeks
  • Keep only cuts that beat break-even

When this does not apply

If you are not the importer of record, you will not get an IEEPA refund, and the money in this play does not exist for you. If your product has a thin margin, a $1 cut can need a 40% or bigger unit lift, which few listings deliver. e.l.f. is a low-price, high-repeat brand with heavy marketing behind it; a one-time purchase product gains less from lower price. And its 35% organic growth also had new launches and international expansion behind it, so the price test is one driver, not the whole story.

Sources

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