ELF Beauty Lifts Outlook as Q2 Net Sales Jump 51% to $520.8M

ELF Beauty raised its full-year sales outlook after net sales jumped 51% year on year to $520.8 million in the quarter ended September 30. Net income climbed to roughly $30 million, up from just under $3 million a year earlier.

The company now expects net sales to grow between 22% and 24% in FY27, up from its previous forecast of 18% to 20%. Chief executive Tarang Amin credited a "passionate team of owners, deep engagement with our community and democratising access to the best of beauty."

The acquisition of Hailey Bieber's brand Rhode, announced in May 2025, contributed to the Q2 result, and analysts expect it to keep driving growth. But the underlying business is also performing. Neil Saunders, managing director at GlobalData, said "organic growth remains strong and is being driven by both volume and pricing."

"There is also balance in geography, which means that while international is delivering stellar numbers, there's still healthy expansion in the US," Saunders said. "A lot of this is underpinned by very strong product launches and a clear value position which is appealing to consumers."

What Do the Numbers Reveal Beneath the Headline?

Retail brand strategist and marketing consultant Bethany Paris Ramsay said the results tell two stories, not one. "Rhode was a meaningful contributor, but the 51 per cent headline tells two stories," she told Inside Retail.

According to ELF Beauty, Rhode contributed about 16 percentage points of the growth, while organic sales grew roughly 35%. The flagship ELF Cosmetics brand gained market share over the same period.

"That matters because ELF Beauty is building a prestige business while its core affordable makeup brand is still winning shoppers," Ramsay said. "What ELF Beauty bought with Rhode was a brand people were already looking for."

Barney Stacher, CEO of consultancy Retail OCD, argued the growth stems from how the company serves consumers, not from one acquisition. "ELF Beauty has built a beauty business that understands how people discover, discuss and buy products today," he said. "It combines accessible pricing, a steady stream of product innovation and marketing that gives consumers something to talk about. Just as important, shoppers can move from seeing a product online to finding it at a retailer or buying it directly."

Stacher cautioned that Bieber's association with Rhode will not, by itself, keep the brand on a shelf or in a routine. "The opportunity for ELF Beauty is to help Rhode reach more shoppers, including through its international expansion, while preserving the distinct identity that made people interested in it in the first place," he said.

Can ELF Beauty Keep Up the Momentum?

On an earnings call, Amin pointed to international expansion and a wider retail footprint for Rhode as the next levers. "We're still in the early days of international expansion," he said.

International accounted for approximately 25% of ELF Beauty's net sales on a trailing 12-month basis, against roughly 70% for its legacy peers. "We believe this gap represents one of our biggest opportunities, and the demand is already there," Amin said. "About 65 per cent of ELF Cosmetics and 75 per cent of Rhode's social following is outside the US. Even after Rhode's launch in Europe, the brand is still only in 40 per cent of Sephora's global doors."

"We still have a lot further to go," he added. "There isn't a market in the world that doesn't want Rhode right now."

What Could Slow the Growth?

Some analysts doubt the current rate will hold. "All that said, I don't think this kind of growth is the new normal and we can expect a return to lower, but still strong, numbers in subsequent quarters," Saunders said.

Ramsay flagged reorder behavior as the metric to watch. "Filling shelves for a major retail launch can give sales a big lift," she said. "I'd watch what Sephora needs to reorder once the initial excitement settles and whether the shoppers who came in for a Rhode lip treatment come back for another."

Stacher raised the same question about repeat purchases once launch excitement fades. Over the coming quarters, ELF Beauty must keep its core brand compelling on value and innovation while scaling Rhode without overexposing it.

"A viral moment can get a product into the shopping basket," Stacher concluded. "A good experience gets it back onto the shopping list."