E.l.f. Beauty reported substantially elevated profits in its fiscal first quarter ended June 30, attributing much of the gain to federal tariff refunds totaling roughly $50 million plus associated interest payments stemming from duties that were struck down by the Supreme Court. The company’s net income reached $66.6 million, or $1.12 per share, compared with $33.3 million, or 58 cents per share, in the prior year period. On an adjusted basis excluding non-recurring tax-related charges and stock-based compensation, the company posted earnings of $1.75 per share. Quarterly revenue climbed to $479.4 million, up approximately 36% from $353.7 million a year earlier.
Company leadership acknowledged that the tariff refund windfall represented a one-time boost that would not recur in future periods. Chief Executive Officer Tarang Amin stated the company intended to reinvest the refund proceeds into pricing strategies and marketing initiatives across its brand portfolio. Additionally, the company anticipated receiving around $8 million in supplementary refunds. Without the tariff benefit, management noted that gross margin would have expanded approximately 3.5 percentage points, largely attributable to price increases implemented in the prior year and lower tariff costs.
The strong quarterly performance prompted E.l.f. to elevate its financial guidance. The company now projects full-year revenue between $1.94 billion and $1.97 billion, exceeding Wall Street expectations of $1.86 billion and surpassing its prior range of $1.84 billion to $1.87 billion. Adjusted earnings per share guidance was raised to a range of $3.50 to $3.55, beating consensus estimates of $3.33 and up from the previous $3.27 to $3.32 range.
Management disclosed that the company recently conducted a comprehensive pricing study encompassing 80% of its product assortment, implementing temporary price reductions averaging $1 per item to assess consumer demand sensitivity. Results indicated that approximately 90% of tested products showed no meaningful change in unit sales volume when prices were reduced, while roughly 10% of items demonstrated potential for volume gains through lower pricing. The company identified specific examples where price adjustments affected purchasing behavior, such as its Cream Glide Lip Liner, which saw changes when reduced from $3 to $2, while its best-selling Power Grip Primer showed minimal volume response to price reduction.
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