E.l.f. Beauty announced on Wednesday that it significantly outperformed market expectations, reporting a 51% increase in net sales for its second fiscal quarter. This strong performance marks the company's 31st consecutive quarter of growth, a streak attributed to robust results across its entire product portfolio. The revenue surge was fueled by positive trends in both retail and e-commerce sectors, with gains recorded in both domestic and international markets.
CEO Tarang Amin highlighted the breadth of this success in an interview with CNBC, noting that every brand within the company contributed to the quarter's growth. He stated that the company is currently the most-searched brand on TikTok Shop and holds the number two position for cosmetics on that platform. Amin also pointed to strong results from Rhode, a skincare brand that E.l.f. acquired last year, as a key driver of this momentum.
Following the better-than-anticipated quarter, the company has raised its full fiscal-year guidance. It now projects net sales between $2 billion and $2.03 billion, an increase from its previous estimate of $1.94 billion to $1.97 billion. Additionally, the adjusted EBITDA forecast has been raised to a range of $421 million to $427 million, up from the earlier projection of $401 million to $407 million.
The company also adjusted its expectations for adjusted earnings per share, now anticipating a range of $3.82 to $3.86, which surpasses the prior guidance of $3.50 to $3.55. Net income is expected to fall between $231 million and $233 million, a notable increase from the previous range of $212 million to $215 million. This is the second time in two quarters that E.l.f. has raised its outlook after exceeding internal targets.
In its second fiscal quarter, which ended on September 30, E.l.f. reported a net income of $30.03 million, or 50 cents per share. This figure represents a substantial increase from the roughly $3 million, or 5 cents per share, reported during the same period last year. The company's actual revenue of $520.8 million also exceeded the $470.3 million estimated by analysts in an LSEG survey, while adjusted earnings per share of $1.21 far outpaced the expected 60 cents.
International expansion has been a particularly bright spot for the retailer, with business in those channels growing by 165%. Amin noted that only 25% of the company's total business currently originates outside the United States. He described this as a tremendous opportunity to continue building on the current momentum in global markets.
The company also reported a 1.6% increase in gross margin during the quarter. This improvement included a 0.3% benefit derived from tariff refunds. Amin explained that the company plans to reinvest these funds into pricing strategies and marketing efforts to sustain growth. Although the majority of the refunds were received in the first fiscal quarter, some of those funds flowed through the second quarter. The company expects to receive a total of approximately $55 million in refunds for the year.
Leveraging these tariff benefits, E.l.f. lowered the price of about 10% of its units by one dollar. Amin indicated that this strategic move has resulted in great unit momentum, helping to drive the overall sales increase seen in the latest quarter. The company remains very bullish on the upcoming holiday season, expecting high sales volumes through the end of the year.
