E.l.f. Beauty plans to reverse some of the tariff-driven price increases it implemented less than a year ago as consumers face rising gas prices and declining demand, the company said today [1, 2].
In August 2025, E.l.f. raised prices by $1 across its entire product range due to tariffs [1]. The company tested a $4 price cut on its $18 Halo Glow skin tint in May 2026, which resulted in a nearly 40% jump in sales, revealing strong consumer sensitivity to price changes [1].
Encouraged by this response, E.l.f. said it will test additional price reductions on selected product lines to stimulate unit growth and strengthen its value proposition during a period of consumer hardship [1, 2]. CEO Tarang Amin said, "Whenever you take a price increase that's that big, you're going to see unit degradation, but I would say we've seen units drop off a bit more in the last few months as consumers have particularly been suffering with higher costs. So it's one of the reasons why we want to reinforce the value proposition we have" [1].
The decision comes amid ongoing inflation and geopolitical tensions in the Middle East that have kept oil prices elevated, limiting consumers' disposable income and curbing retail spending [2]. Amin added that the company plans to "truly reshape the value proposition of our products by lowering previously tariff-induced price increases to regain lost market share in a highly competitive beauty market" [2].
E.l.f. announced fiscal fourth-quarter results for the period ending March 31, 2026, reporting revenue rose 35% year-over-year to $449 million, beating Wall Street expectations [1]. Gross margin increased by 1.4 percentage points to 73%, boosted by higher pricing, which is now partially being rolled back [1].
The company posted a net loss of $49.4 million or 82 cents per share, primarily due to a $57.6 million acquisition-related charge tied to its Rhode brand purchase. Excluding one-time expenses, net income was $19.4 million or 32 cents per share [1].
The company plans further price reduction tests on select product families in the coming months as it aims to balance volume growth with profitability amid challenging consumer conditions [1, 2].
