e.l.f. Beauty plans more price cuts to court increasingly cost-conscious shoppers

• e.l.f. Beauty plans to slash prices on some products in response to more price-sensitive consumers.
• A price-cut test on its Halo Glow skin tint led to a nearly 40% increase in sales.
• Higher gas prices are forcing households to pull back on discretionary purchases.

As gas prices climb and wallets tighten, e.l.f. Beauty is discovering that shoppers still want their glow — just at a discount.

The cosmetics retailer plans to take "some pricing actions" on certain products as consumers become squeezed by other rising costs, Tarang Amin, the CEO of e.l.f. Beauty, said during the company's fourth quarter earnings call on Wednesday.

"To that end, we recently reduced the price of e.l.f.'s Halo Glow skin tint from $18 to $14," said Amin. "Initial test results show a 38% lift on Amazon and a 36% lift across all retailers, including a triple-digit sales lift on TikTok Shop."

The planned price adjustments come as e.l.f. Beauty posted its fourth quarter earnings on Wednesday, and after the company raised prices in August by $1 across its product lineup to offset tariff-related costs.

According to the earnings report, e.l.f. Beauty's adjusted earnings of 32 cents per share and revenue of $449 million both beat Wall Street estimates. Partially thanks to prior price hikes, the company's gross margin also expanded by 1.4% year over year.

Shares of e.l.f. Beauty, which owns brands including Hailey Bieber's Rhode, are down nearly 38% over the past year.

There are growing signs that higher oil and gas prices are beginning to squeeze US consumers, particularly lower-income households. National gas prices have climbed sharply in recent months as the war with Iran disrupted global oil markets, with AAA data showing average gasoline prices above $4 per gallon nationwide.

On Wednesday's call, Amin said that if oil prices remain around $100 per barrel on average, the company could face "incremental cost headwinds" of $15 to $20 million in fiscal year 2027, some of which would be offset by International Emergency Economic Powers Act tariff refunds.

"As we consider the conflict in the Middle East, we are starting to see some inflationary pressure on commodities and transportation costs," said Amin. "Our outlook does not factor in the impact of oil prices or tariff refunds, given the situation remains fluid."

The Richmond Federal Reserve found in its May 12 report that rising fuel costs are forcing households to cut back on discretionary purchases as more income goes toward necessities such as commuting and groceries.

Many major companies, including Walmart and Nike, have attributed price increases in 2025 to tariffs. The Customs and Border Protection is rolling out at least $166 billion in tariff refunds to businesses that have paid related costs, after the Supreme Court ruled all tariffs enacted under the IEEPA illegal in February.

While some companies, such as FedEx and UPS, have pledged to return refunds to customers who paid, others awaiting refunds have been served with class-action lawsuits as consumers attempt to claw back the price hikes they paid.