e.l.f. Beauty warns of weak year; Iran war could cost up to $20M

• Full-year sales guidance of $1.84-$1.87 billion falls short of the $1.87 billion analyst consensus, with adjusted profit forecast at $3.27-$3.32 per share versus $3.36 estimate
• CFO cited cost-savings programs and potential tariff refunds as offsets to the $15-20 million oil price impact, though this impact is not included in official guidance
• Company maintains pricing advantage with 75% of products at $10 or less and reports consumers are not trading down despite macroeconomic uncertainty

E.l.f. Beauty Warns of Weak Year; Iran War Could Cost Up to $20M

Key Developments:

E.l.f. Beauty issued weak fiscal year guidance on May 20, citing potential $15-20 million impact from surging oil prices related to the Iran war in fiscal 2027. The company forecast annual net sales of $1.84-1.87 billion, with the midpoint below analyst estimates of $1.87 billion. Annual adjusted profit is projected at $3.27-3.32 per share, also missing the $3.34 consensus.

Tariff Situation:

The cosmetics maker, which sources approximately 75% of production from China, paid $58.5 million in tariffs under President Trump's import duties (later struck down by the Supreme Court). CFO Mandy Fields confirmed the company is working to secure refunds and implementing cost-savings programs to offset the Iran war impact, though these mitigation efforts are not included in current forecasts.

Strong Q4 Performance:

Despite weak guidance, e.l.f. exceeded fourth-quarter expectations with sales rising 35% to $449.3 million versus estimates of $423.1 million. Quarterly adjusted earnings also beat expectations at $0.96 per share compared to the $0.88 forecast.

Market Position:

The company continues benefiting from cost-conscious consumer behavior, with approximately 75% of products priced at $10 or less. CFO Fields noted consumers are still spending on beauty products and the company isn't observing trading down effects currently.

Outlook:

While acknowledging macroeconomic headwinds and geopolitical risks, management remains confident in demand resilience within the beauty category. The company joins other retailers navigating tariff uncertainty and elevated oil costs.