Elf Beauty lifts outlook as cut-price cosmetics fuel sales surge

Elf Beauty has raised its annual financial forecasts following a 36% surge in quarterly sales driven by high demand for its affordable product range. The company, which owns brands including Elf Cosmetics and Hailey Bieber’s Rhode, reported its 30th consecutive quarter of revenue growth as cost-conscious consumers pivot away from premium beauty brands. This performance underscores a significant shift in the cosmetics market toward accessible pricing and strategic international expansion.

Elf Beauty reported a substantial increase in its fiscal 2027 net sales guidance, now expecting between £1.44 billion and £1.46 billion, up from previous estimates. The company’s first-quarter sales reached £356 million, significantly outperforming analyst expectations of £319 million and marking 30 straight quarters of growth. Adjusted earnings also saw a major boost, hitting £1.30 per share compared to the 53p forecast, leading the group to raise its full-year earnings guidance to between £2.60 and £2.64 per share.

The retailer’s success is largely attributed to its accessible pricing strategy, with approximately 75% of its products priced at £7.43 or less. Chief executive Tarang Amin noted that the company recently cut prices across 10% of its portfolio to drive higher sales volumes, a move that successfully increased unit momentum. Despite these price reductions, gross margins rose to 83%, bolstered by favorable pricing changes, lower tariff rates, and duty refunds previously paid by the business.

To reduce its reliance on the US market, which currently accounts for the vast majority of revenue, Elf is aggressively expanding into the UK, Canada, and Germany. The company is strengthening its partnership with Boots in the UK and plans to launch the Rhode brand in 19 European countries through Sephora next month. Additionally, Elf is set to enter the Brazilian market via Sephora, aiming to bring its diverse portfolio—which includes Elf Skin, Naturium, Well People, and a recently launched haircare line—to a broader global audience.