e.l.f. Beauty delivered another blockbuster quarter in Q3 fiscal 2026, with soaring sales, stronger profitability, and a higher full year outlook that keeps the Oakland based beauty disruptor firmly in hyper growth mode. Affordable prestige positioning, the integration of Rhode, and a relentless newness and marketing engine continue to win share across U.S. mass, prestige, and global markets.
Q3 Headline Numbers: 38% Net Sales Growth
For the three months ended December 31, 2025, net sales jumped 38% year over year to $489.5 million, driven by growth in both retailer and e‑commerce channels in the U.S. and internationally. Pricing and mix were the big swing factors, with units roughly flat but higher price points and premium innovation doing the heavy lifting.
Gross profit rose to $347.5 million, though gross margin edged down about 30 basis points to 71% as higher tariff costs outweighed pricing and mix benefits. Operating income climbed to $67.5 million, up from $35.1 million a year earlier, underscoring the brand’s ability to scale while still investing heavily in marketing and distribution.
On the bottom line, net income reached $39.4 million on a GAAP basis. Diluted earnings per share were $0.65 on a GAAP basis, while adjusted diluted EPS came in at $1.24, reflecting strong underlying profitability once non recurring items are stripped out.
Market Share Gains And Rhode’s Breakout Launch
“Our Q3 results, which included 130 basis points of market share gains for our namesake e.l.f. Cosmetics brand and a record breaking launch of rhode in Sephora in the U.K., are a continuation of the consistent, category leading growth we’ve delivered over the past 28 quarters,” Tarang Amin, Chairman and CEO of e.l.f. Beauty, said. He added that the company’s “value proposition, powerhouse innovation and disruptive marketing engine” give it confidence to keep growing share and deliver “best in class growth in beauty,” reflected in the raised fiscal 2026 outlook.
Across channels, U.S. net sales grew 36%, while international net sales surged 44%, underscoring the brand’s global runway. The blockbuster Rhode launch in Sephora U.K. was highlighted as a major contributor, with external reports noting the brand added roughly $128 million to Q3 net sales.
Profitability: Adjusted EBITDA Up 79 Percent
Profitability scaled even faster than sales. Adjusted EBITDA for the quarter was $123.0 million, or 25% of net sales, up 79% year over year. That level of margin, rare for a growth brand at this stage, gives e.l.f. room to keep investing ahead of the curve in marketing, talent, and international expansion.
For the nine months ended December 31, 2025, net sales increased 21% to $1.1872 billion, with adjusted EBITDA of $276.3 million, or 23% of net sales, up 28% year over year. The balance sheet also looks stronger, with $196.8 million in cash and cash equivalents versus $73.8 million a year prior, even as long term debt increased to $816.7 million, reflecting financing for acquisitions and growth.
Raised Fiscal 2026 Outlook
On the back of the Q3 beat and continued momentum, e.l.f. Beauty lifted its fiscal 2026 guidance. The company now expects full year net sales of $1.60 to $1.61 billion, up from a prior range of $1.55 to $1.57 billion, implying roughly 22% to 23% year over year growth at the midpoint.
Adjusted EBITDA is now forecast at $323 to $326 million, versus a prior $302 to $306 million, signaling confidence in sustaining mid 20s EBITDA margins despite higher tariffs and stepped up brand investment. External commentary notes that management still expects some margin pressure in the second half from heavier marketing and space expansion, but the raised outlook underlines the strength of the core model.
