ELF

ELF's growth story remains intact at the revenue line — FY2026 sales of $1.64B (+24.6% YoY) extend a four-year run from $392M in FY2022, and gross margin held at a premium 70.7%. Operating cash flow actually accelerated to $213M (+58.8%), and the brand portfolio expanded materially with the August 2025 rhode acquisition, which sits alongside e.l.f. Cosmetics, e.l.f. SKIN, Naturium and Well People. The relationships with Target, Walmart, Amazon and Sephora that drove the rise from indie challenger to category leader are still in place, and management is reinvesting aggressively.

Below the gross line, however, the picture has degraded sharply. Operating income collapsed 53.4% to $73.6M (4.5% margin vs. ~12% implied a year ago), net income fell 76.5% to $26.3M, and diluted EPS dropped to $0.44 from ~$1.92. The MD&A is explicit about the cause: the company paid roughly $58.5M of IEEPA tariffs in FY2026 because the majority of products are sourced from China, with rates ranging from 25% to as high as 170% during 2025. There is a potential refund pathway following the February 2026 Supreme Court ruling and the CBP's April 2026 CAPE system, but the new Section 122 10% global tariff (effective Feb 24, 2026) keeps the structural cost overhang in place. D&A nearly doubled to $79.4M — purchase-accounting fingerprints from rhode — suggesting reported earnings will stay depressed even if cash flow holds.