E.l.f. Beauty reported substantial profit growth in its fiscal first quarter ended June 30, driven largely by $50 million in tariff refunds from the federal government plus related interest payments. 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 and stock-based compensation charges, the company posted earnings of $1.75 per share.
Quarterly revenue rose to $479.4 million, representing approximately 36% growth from $353.7 million a year earlier. The tariff refund boosted gross margin expansion to 14 percentage points year-over-year, though management indicated that without the one-time windfall, margin growth would have reached approximately 3.5 percentage points due to pricing actions and lower tariff impacts.
CEO Tarang Amin stated the company plans to reinvest the refund proceeds into pricing strategy and marketing efforts across its brand portfolio. The company is still awaiting approximately $8 million in additional refunds. Management acknowledged that the outsized profitability seen during the quarter represents a non-recurring benefit that will not continue in future periods.
Based on the quarter’s performance, E.l.f. Beauty raised its full-year guidance. The company now projects annual revenue between $1.94 billion and $1.97 billion, surpassing prior expectations of $1.86 billion and its previous range of $1.84 billion to $1.87 billion. Full-year adjusted earnings per share guidance increased to between $3.50 and $3.55, exceeding prior expectations of $3.33 and the previous range of $3.27 to $3.32.
The company conducted pricing research across 80% of its product assortment, testing average price reductions of $1 per item. Results indicated that approximately 90% of the assortment showed no significant impact on unit sales from lower prices, while roughly 10% demonstrated meaningful volume response to price decreases. Management used these findings to identify which products could benefit from strategic pricing adjustments to drive unit momentum.
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