e.l.f. Beauty Inc (NYSE:ELF) is expected to report a strong fiscal first quarter performance when it releases results on August 5, though investors are likely to remain focused on management's outlook for consumer demand and whether the company maintains its full-year guidance.
UBS forecasts first-quarter earnings per share of $0.80, ahead of the Visible Alpha consensus estimate of $0.74, citing continued strength from rhode and the potential benefit of tariff refunds. The firm wrote it would not be surprised by another bottom-line beat.
Despite the anticipated earnings strength, UBS expects e.l.f. Beauty to reiterate its fiscal 2027 guidance rather than raise it, noting that the current outlook excludes several variables, including potential tariff refunds and pricing actions.
The company's existing guidance calls for fiscal 2027 earnings per share of $3.27 to $3.32, net sales growth of 12% to 14%, including organic sales growth of 4% to 5%, and adjusted EBITDA of $379 million to $385 million.
UBS forecasts total sales growth of 13.7%, slightly below Wall Street expectations, while projecting adjusted EBITDA of $385 million, above the Street estimate of $376 million. The brokerage's full-year EPS estimate of $3.35 is modestly below consensus.
Ahead of the report, UBS highlighted mixed sales trends. For the 13 weeks ended June 27, retail dollar takeaway increased 10.2%, though growth excluding Naturium was 1.1%, compared with 1.7% in the prior quarter. They also noted the company has indicated shipment timing is likely to result in reported organic sales growth trailing consumer demand.
UBS expects organic sales growth to come in below consensus, forecasting growth of 3.3% versus the Street's expectation of 4.2%. It also projects rhode will contribute approximately $120 million in revenue during the quarter, above the Visible Alpha consensus of $92 million.
The analysts noted that investor sentiment remains divided following the stock's recent rally, with shares gaining 44% since the previous earnings report.
"Bulls point to the company's attractive growth profile and the potential for numbers to move higher, while bears remain focused on the durability of underlying demand," UBS wrote.
The firm added that the market reaction is likely to depend less on whether e.l.f. Beauty beats quarterly estimates and more on management's commentary around demand trends.
"As has been the case for the past several quarters, we expect the stock reaction to be driven less by the reported results and more by management's ability to reinforce confidence in the demand outlook," UBS wrote.
UBS maintains a ‘Neutral’ rating on e.l.f. Beauty with an unchanged $80 price target, slightly below current levels of about $84.