We use cookies to understand how you use our site and to improve your experience.
This includes personalizing content and advertising.
By pressing "Accept All" or closing out of this banner, you consent to the use of all cookies and similar technologies and the sharing of information they collect with third parties.
You can reject marketing cookies by pressing "Deny Optional," but we still use essential, performance, and functional cookies.
In addition, whether you "Accept All," Deny Optional," click the X or otherwise continue to use the site, you accept our Privacy Policy and Terms of Service, revised from time to time.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
ELF Jumps 18.8% in a Week Amid Rhode Growth and Stronger Guidance
Read MoreHide Full Article
Key Takeaways
ELF raised fiscal 2027 sales guidance to $1.938-$1.968B after first-quarter sales jumped 36%.
Rhode contributed $160M in quarterly sales and is set to expand into Sephora across 19 European countries.
ELF's organic sales excluding Rhode fell at a high-single-digit rate, while its valuation remains elevated.
e.l.f. Beauty, Inc. (ELF - Free Report) shares advanced 18.8% in one week, putting the durability of the recent rally in focus. First-quarter fiscal 2027 results and a raised full-year outlook give investors fresh fundamentals to weigh against that move.
Rhode’s contribution, international expansion and portfolio growth support the bullish case. Still, weakness in the core e.l.f. business and a premium valuation leave less room for execution missteps.
Rhode Gives ELF a Powerful Growth Engine
Rhode contributed about $160 million of first-quarter fiscal 2027 net sales, exceeding management’s expectations. Its latest summer launch generated $27 million of direct-to-consumer sales in one day and attracted 90,000 new consumers.
More than 70% of that launch-day sales came from existing consumers, pointing to repeat demand. Rhode is also set to enter Sephora across 19 European countries in September, expanding a brand that remains in less than 20% of Sephora’s global store base.
Management raised fiscal 2027 net sales guidance to $1.938-$1.968 billion, implying 18%-20% growth. The prior outlook called for $1.835-$1.865 billion and 12%-14% growth.
Adjusted earnings guidance also increased to $3.50-$3.55 per share from $3.27-$3.32. The higher outlook follows first-quarter net sales growth of 36% to $479.4 million and adjusted earnings of $1.75 per share.
International Growth Broadens ELF's Runway
International net sales increased 61% in the first quarter, well ahead of 29% growth in the United States. Planned expansion includes e.l.f. with Sephora in Brazil, Rhode across Europe and Naturium with Sephora in Canada and Mexico.
The broader beauty market also shows continued demand across channels. Ulta Beauty, Inc. (ULTA - Free Report) reported an 11.1% first-quarter fiscal 2026 net sales increase, while its comparable sales rose 5.3%, underscoring ongoing activity in specialty beauty retail.
Core ELF Weakness Tests the Rally
Organic net sales excluding Rhode declined at a high-single-digit rate in the first quarter, while companywide unit volumes reduced growth by about three percentage points. That softness shows the flagship business has not yet matched the pace of the acquired portfolio.
Management expects improving e.l.f. trends and raised fiscal 2027 organic net sales growth guidance to 6%-7%. The recovery still depends on innovation, value actions and demand holding up as consumers remain concerned about the economy.
Image Source: Zacks Investment Research
ELF's Valuation Raises the Bar
ELF trades at 26.8X forward 12-month earnings, above 20.7X for the Zacks cosmetics sub-industry, 16.8X for the Consumer Staples sector and 20.7X for the S&P 500. That premium raises the importance of delivering on the new outlook.
Competitive context is mixed. The Estee Lauder Companies Inc. (EL - Free Report) raised its fiscal 2026 organic sales outlook to about 3% in May, but its makeup net sales were virtually flat in the fiscal third quarter, illustrating uneven demand even among large beauty companies.
ELF's Growth Signal Stays Strong
The one-week rally is backed by faster reported growth, a stronger fiscal 2027 outlook and meaningful Rhode expansion. The counterweight is clear: core-brand softness and a premium earnings multiple make continued execution important.
ELF currently carries a Zacks Rank #1 (Strong Buy) and a Growth Score of A, a combination that supports the near-term growth case. The Zacks Style Scores are designed to complement the Zacks Rank by evaluating characteristics tied to different investing styles. You can see the complete list of today’s Zacks #1 Rank stocks here.
Its Value Score of F and Momentum Score of D are less favorable, while the VGM Score of C reflects a mixed overall profile. Those readings temper the growth signal and suggest investors should weigh the company’s operating momentum against valuation and price-related characteristics.
View the Zacks #1 Rank List
Image: Shutterstock
ELF Jumps 18.8% in a Week Amid Rhode Growth and Stronger Guidance
Key Takeaways
e.l.f. Beauty, Inc. (ELF - Free Report) shares advanced 18.8% in one week, putting the durability of the recent rally in focus. First-quarter fiscal 2027 results and a raised full-year outlook give investors fresh fundamentals to weigh against that move.
Rhode’s contribution, international expansion and portfolio growth support the bullish case. Still, weakness in the core e.l.f. business and a premium valuation leave less room for execution missteps.
Rhode Gives ELF a Powerful Growth Engine
Rhode contributed about $160 million of first-quarter fiscal 2027 net sales, exceeding management’s expectations. Its latest summer launch generated $27 million of direct-to-consumer sales in one day and attracted 90,000 new consumers.
More than 70% of that launch-day sales came from existing consumers, pointing to repeat demand. Rhode is also set to enter Sephora across 19 European countries in September, expanding a brand that remains in less than 20% of Sephora’s global store base.
e.l.f. Beauty Price, Consensus and EPS Surprise
e.l.f. Beauty price-consensus-eps-surprise-chart | e.l.f. Beauty Quote
ELF's Raised Outlook Supports the Momentum
Management raised fiscal 2027 net sales guidance to $1.938-$1.968 billion, implying 18%-20% growth. The prior outlook called for $1.835-$1.865 billion and 12%-14% growth.
Adjusted earnings guidance also increased to $3.50-$3.55 per share from $3.27-$3.32. The higher outlook follows first-quarter net sales growth of 36% to $479.4 million and adjusted earnings of $1.75 per share.
International Growth Broadens ELF's Runway
International net sales increased 61% in the first quarter, well ahead of 29% growth in the United States. Planned expansion includes e.l.f. with Sephora in Brazil, Rhode across Europe and Naturium with Sephora in Canada and Mexico.
The broader beauty market also shows continued demand across channels. Ulta Beauty, Inc. (ULTA - Free Report) reported an 11.1% first-quarter fiscal 2026 net sales increase, while its comparable sales rose 5.3%, underscoring ongoing activity in specialty beauty retail.
Core ELF Weakness Tests the Rally
Organic net sales excluding Rhode declined at a high-single-digit rate in the first quarter, while companywide unit volumes reduced growth by about three percentage points. That softness shows the flagship business has not yet matched the pace of the acquired portfolio.
Management expects improving e.l.f. trends and raised fiscal 2027 organic net sales growth guidance to 6%-7%. The recovery still depends on innovation, value actions and demand holding up as consumers remain concerned about the economy.
Image Source: Zacks Investment Research
ELF's Valuation Raises the Bar
ELF trades at 26.8X forward 12-month earnings, above 20.7X for the Zacks cosmetics sub-industry, 16.8X for the Consumer Staples sector and 20.7X for the S&P 500. That premium raises the importance of delivering on the new outlook.
Competitive context is mixed. The Estee Lauder Companies Inc. (EL - Free Report) raised its fiscal 2026 organic sales outlook to about 3% in May, but its makeup net sales were virtually flat in the fiscal third quarter, illustrating uneven demand even among large beauty companies.
ELF's Growth Signal Stays Strong
The one-week rally is backed by faster reported growth, a stronger fiscal 2027 outlook and meaningful Rhode expansion. The counterweight is clear: core-brand softness and a premium earnings multiple make continued execution important.
ELF currently carries a Zacks Rank #1 (Strong Buy) and a Growth Score of A, a combination that supports the near-term growth case. The Zacks Style Scores are designed to complement the Zacks Rank by evaluating characteristics tied to different investing styles. You can see the complete list of today’s Zacks #1 Rank stocks here.
Its Value Score of F and Momentum Score of D are less favorable, while the VGM Score of C reflects a mixed overall profile. Those readings temper the growth signal and suggest investors should weigh the company’s operating momentum against valuation and price-related characteristics.