E.l.f. Beauty Inc. closed fiscal 2026 with another quarter of double-digit sales growth, helped by ecommerce, retail gains and its fast-growing Rhode brand.

But the company is also preparing targeted price cuts after tariff-related price increases weighed heavily on demand for its core e.l.f. products.

In its latest earnings report, e.l.f. said net sales for the fourth quarter ended March 31 rose 35% year over year, reaching $449.3 million. For the full year, net sales increased 25% to $1.64 billion, driven by growth in both retailer and ecommerce channels in the U.S. and abroad.

While e.l.f. did not break out ecommerce revenue, CEO and chairman Tarang Amin said on the earnings call that digital channels continue to outperform.

E.l.f. Beauty, whose portfolio includes e.l.f. Cosmetics, e.l.f. SKIN, Well People, Naturium and Rhode, ranks No. 328 in the Top 1000 Database. The database is Digital Commerce 360’s ranking of North America’s leading online retailers by annual web sales.

What’s driving sales growth for e.l.f. Beauty?

In particular, Rhode has quickly become one of e.l.f. Beauty’s biggest growth drivers. The Hailey Bieber-founded beauty brand, which e.l.f. acquired in August 2025, contributed $113 million to Q4 net sales, or about 34 percentage points of the company’s growth, chief financial officer Mandy Fields said on the call.

Excluding Rhode, e.l.f. Beauty’s Q4 organic net sales rose about 1% year over year, she said.

At the same time, the core e.l.f. brand is entering fiscal 2027 on a softer footing. To help revive unit demand, Amin said the company plans to roll out targeted price cuts across several product families in the coming weeks. The move follows last August’s across-the-board $1 price increase, which boosted dollar sales but pushed units lower as shoppers pulled back.

“As a result, we are keenly focused on how to deliver a better value and improve unit velocity,” Amin said.

Tariffs remain a pressure point for the company. Fields said e.l.f.’s average tariff rate climbed to about 55% in fiscal 2026, up from 25% the year before. For fiscal 2027, e.l.f. is assuming tariff rates stay at the current 35% level, which could ease some pressure. Amin also said e.l.f. has diversified its supply chain, with manufacturing outside China rising from 1% to more than 45% of production over the past three years.

Rhode and digital channels drive e.l.f. Beauty growth

Amin said e.l.f. continues to see outsized digital growth, as it remains “one of the leaders in connected commerce,” citing strong performance on Amazon and TikTok Shop.

While all five e.l.f. Beauty brands grew in fiscal 2026, Rhode and Naturium delivered particularly strong results, he said.

Rhode generated $390 million in net sales for fiscal 2026, an 80% year-over-year increase. On an annualized basis, global retail sales for the brand surpassed $500 million, Amin said.

That growth came as e.l.f. has pushed Rhode beyond its digital roots. Before the acquisition, Rhode operated as a digital-native, direct-to-consumer brand. Since then, e.l.f. has expanded the brand through Sephora and other retail partners.

In fiscal 2026, Rhode became the No. 1 beauty brand at Sephora North America, Amin said. It also posted record launches with Sephora in the U.K. and with beauty retailer Mecca in Australia and New Zealand.

e.l.f. Beauty’s portfolio

E.l.f.’s broader portfolio also grew. E.l.f. SKIN delivered about $200 million in global retail sales in fiscal 2026. Naturium, which e.l.f. acquired nearly three years ago, generated nearly $250 million in global retail sales — about double its pre-acquisition level — and was the fastest-growing among the top 50 skincare brands in Q4, Amin said.

“Our acquisitions of Rhode and Naturium have meaningfully diversified our business across brands, categories, and supply chain,” he said. “Over the past three years, we’ve seen non-e.l.f. brand sales increase from 0% to 30% of our global consumption.”

Growth also stretched across regions. Fields said U.S. net sales rose 26% in Q4, while international net sales jumped 75%. Amin said e.l.f. is still early in its global expansion, with international sales accounting for about 20% of net sales. That compares with more than 70% for legacy beauty peers.

“There’s a significant pent-up global appetite for our brands,” Amin said. “50% of e.l.f. brand social followers are outside the U.S., and 74% of Rhode followers are outside the U.S.”

Why e.l.f. is cutting some prices

Over the past 12 weeks, Amin said, global consumption for the e.l.f. brand has slowed from high-single-digit growth in fiscal 2026 to low-single-digit growth. Spring product launches also came in softer than expected, he said.

That slowdown follows a $1 price increase e.l.f. took across all e.l.f. brand SKUs in August 2025 to offset several pressures, including tariffs and inflation. Amin said the move lifted dollar sales, but unit sales fell, prompting e.l.f. to test targeted price cuts.

The company recently lowered the price of its Halo Glow Skin Tint to $14 from $18. Amin said initial results showed a 38% lift on Amazon and a 36% lift across all retailers, including a triple-digit sales increase on TikTok Shop.

“Given these results, we’re exploring other pricing opportunities to deliver value to our community,” he said.

Pricing is only one part of the reset. Amin said e.l.f. is also working to improve innovation, expand internationally and build more share in its largest overseas markets, including the U.K., Canada and Germany.

Rhode heads to Europe as e.l.f. weighs tariffs and costs

For fiscal 2027, e.l.f. expects net sales to grow 12% to 14%. Rhode is expected to contribute about 9 percentage points of that growth, Fields said, before becoming part of organic sales later in the fiscal year.

A key piece of that plan is Rhode’s next retail expansion. The brand is set to launch with Sephora in Europe in September, adding to its growing retail presence in the U.S., Canada and the U.K.

The rollout will bring Rhode to Sephora stores and online across 19 European markets, including France, Germany, Italy, Spain, Sweden and Turkey. Sephora falls under parent company LVMH, which is the No. 2 online retailer in Digital Commerce 360’s Europe Database.

Amin said e.l.f. continues to expect “very strong growth rates” from Rhode, though the company has not disclosed a specific forecast for the brand.

“With Rhode in less than 20% of Sephora’s global stores, we see tremendous opportunity in the coming years,” he said. “The biggest issue we’ve had on Rhode is keeping up with the consumer demand.”

e.l.f.’s expectations in 2026

Looking ahead, e.l.f. expects lower tariff costs and the earlier price increases to help gross margin, especially in the first half of fiscal 2027. But Fields said those benefits are expected to be offset as Rhode continues moving further into retail.

The company is also keeping an eye on transportation and commodity costs. If oil prices average about $100 per barrel, e.l.f. could face $15 million to $20 million in additional cost headwinds in fiscal 2027, Fields said.

To help offset those pressures, e.l.f. is relying on internal cost savings and pursuing $58.5 million in refunds for tariffs paid last year. If those refunds come through, Amin said the company plans to put some of that money back into value and unit-growth efforts.

Additionally, e.l.f. plans to direct cash toward brand growth, technology investments — including artificial intelligence (AI) and automation — and infrastructure to support its global retail expansion, Fields said.

e.l.f. narrows portfolio, adds leadership roles

As it works to strengthen the core e.l.f. Brand, e.l.f. is also narrowing its brand portfolio and reshuffling leadership.

Amin said the company recently decided to transfer Keys Soulcare back to Alicia Keys, who partnered with e.l.f. to launch the lifestyle and beauty brand in 2020. Amin said the move lets e.l.f. focus more closely on its five remaining brands.

In April, e.l.f. appointed Kory Marchisotto, formerly global chief marketing officer, to president of e.l.f. Brands. Amin said the newly created role will focus on expanding the e.l.f. brand across categories and geographies. E.l.f. also named Oshiya Savur chief marketing officer of e.l.f. Brands.

In addition, Ekta Chopra was appointed chief digital and AI officer, another newly created role. Amin said Chopra has helped lead e.l.f.’s digital transformation over the past decade, including its recent SAP upgrade.

“Her new role reflects how we see the future,” Amin said, adding that e.l.f. views technology and AI as “core drivers of transformation and growth” across the business.

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