$ELF CFO Says Its Roughly $1 Price Hike Cost It Sales, and the Company Has Rolled Back Many Increases

E.l.f. Beauty ($ELF) CFO Mandy Fields said in a CNBC interview published Oct. 16 that the company's roughly $1 price increase, taken in August 2025 to offset tariffs and inflation, ultimately caused sales to decrease. Once tariff refunds came in, e.l.f. walked back many of those increases and is keeping certain items at lower price points.
The refunds came from tariffs collected under the International Emergency Economic Powers Act. They added about 1,050 basis points to gross margin in the quarter ended June 30, lifting it to 83%. Most of the refund is going into marketing, and the company plans to reinvest its full $50 million tariff refund across the rest of the fiscal year, leaving no net boost to adjusted EBITDA.
Fields previously said e.l.f. tested cutting its Halo Glow skin tint from $18 to $14 and saw a lift of almost 40% on that item. She also said about 75% of the portfolio sits at $10 or less.
Key numbers from the fiscal first quarter:
- Net sales rose 36% to $479.4 million, the 30th straight quarter of net sales growth
- Adjusted earnings were $1.75 per share
- Fiscal 2027 net sales growth outlook raised to 18% to 20%, or $1.938 billion to $1.968 billion, from 12% to 14%
- Total debt stood at $834.2 million, up from $256.7 million a year earlier after the rhode acquisition
- Excluding the one-time refund, full-year gross margin is expected to be roughly flat
Citi raised its price target to $130 from $118 and kept a Buy rating on Oct. 14. Morgan Stanley kept an Equal-weight rating and raised its target to $103 from $90 on Oct. 15.