Ladies and gentlemen, the program is about to begin. Reminder, this webcast presentation is for Bank of America clients only. If you are a member or representative of the press or media, please disconnect now. Thank you. At this time, it is my pleasure to turn the program over to your host, Anna Lizzul. Thank you. Great. Well, good afternoon, everyone. Thanks so much for joining. My name is Anna Lizzul, I'm a lead analyst at BofA covering household personal care and beauty. I'm thrilled today to be joined by Tarang Amin, CEO of e.l.f. Beauty, and Mandy Fields, CFO of e.l.f. Beauty. Thanks so much for joining. Happy Friday, and welcome. Thank you. Thank you for having us. I think this call is especially timely because e.l.f. Beauty reported earnings about a week and a half ago, but it feels like ages given how much has gone on in the market. I wanted to start off with your guidance for fiscal 2027 and fiscal Q1. You're guiding to net sales up 12%-14% for the year, with organic net sales up 4%-5%, but fiscal Q1 organic net sales down high single digits. We're continuing to see here in the scanner data on organic sales, some weakness for the e.l.f. brand. Was wondering if you could talk a bit about that weakness, and then farther out, what gives you confidence in the rebound in fiscal Q2 that you're expecting mid-teens percentage organic net sales growth? I don't know if Mandy's frozen. Oh, yeah. Here we go. There you are. Okay, I'm back. I don't know how that happens, in the office, having internet issues. Well, anyway, thanks for having us, Anna. On guidance, yes, we have set out a guidance for the year at the total company level at 12%-14%, on an organic basis, 4%-5%, and then for Q1, we called out the high single-digit decline, primarily driven by a cycling, a pull-up of shipments last year. If you recall, we launched on our new ERP on July 1st. Some of our retailers did put in orders ahead of that switchover to avoid any kind of out of stocks or anything like that. That's really the main reason that you're going to see those high single-digit declines in Q1. From a scAnnar standpoint, we talked about scAnnar is not where we want to see it right now. Our spring innovation got off to a bit of a slower start than we expected. We're also cycling. If you recall last year, we launched our melting lip balms early, and so we're still cycling through that until we launch our fall innovation. You're going to see scAnnar kind of bounce around from week- to- week. Doesn't take away from still seeing that 4%-5% range, as our outlook for the first half of the year as well. You mentioned the Q2 being up mid-teens. There's just going to be some timing. We still feel good about the 4%-5% overall. Okay, great. In terms of your guidance philosophy overall, you talked about a number of things which are actually not included in the guidance, so tariff refunds, pricing actions, oil-related cost headwinds. Does this mean that there could be potential downside risk to your outlook if you're looking at some of these actions or if they don't take hold? Well, yeah, we see this outlook, and how we've approached our guidance historically is that we put a baseline case out there at the beginning of the year. I think if you look back over the last seven years, we pretty much have a track record of ending in a better place than where we started the year. As we think about these additional things that we want to pull on, like the value and the price discovery that we're doing, and launching additional innovation this year, we see those as things that can further strengthen the trends that we're seeing and support that unit volume growth that we want to see. Certainly do not expect to see further downside driven by those actions. We also have the potential tariff refund of about $58.5 million is what we paid in IEEPA tariffs last year. We see that as a potential mitigator to any of those headwinds that we called out from a cost standpoint from oil. On pricing, wanted to dive into that topic as well. You're targeting certain SKUs for pricing reductions based on consumers having to make difficult everyday choices. You were an early mover last year in the mass beauty space to take pricing due to the tariff impact in 2025. How does that price gap compare to peers versus the prior increase that you took in August 2025 with these reductions? As you're looking at the total portfolio, what percent of the portfolio are you reducing prices on? As we look forward, given you are lapping that price increase of $1 that you took in August, how are you planning to support driving volume growth once we hit that timeframe? Anna, on pricing, I would say one of the key competitive advantages of e.l.f. Beauty is our superior value proposition, and we take that responsibility of superior value very seriously. As you know, last year in August, we were forced to take a dollar price increase with the combination of very high tariffs as well as inflationary pressures. It was about a 15% price increase. Overall, that pricing was successful from a standpoint of driving higher dollar sales. We saw units kind of in the mid-single-digit decline range. As we've gone into the year, particularly given the state of the consumer, we saw some further unit declines, pricing is always an area that we take a look at, particularly in terms of reinforcing our value proposition. We did a test where we took our skin tints from $18- $14, and we saw almost a 40% lift, even higher in more recent weeks. That gave us an indication that perhaps there's some other items that we can take a look at to reinforce the superior value that we have. We're in the process right now of taking a subset of our range. It's actually a pretty small percentage of our range, where we're also testing, do we see higher unit velocities from that? As from a price gap standpoint, I would say when we took our pricing, we were pretty much the only major player that took pricing during that time. We were naked in terms of the price increase that we had. In the last four or five weeks, we have seen AUR in the category come up almost 9%. We are now seeing some pricing action from a number of our competitors, which should make that gap pretty much more in line. We still have a phenomenal value relative to the rest of mass beauty. I think our average unit retails are closer to $7 versus about $10 for everyone else, and well over $20 for prestige. We feel good from a value standpoint in terms of what we're going to be able to do, particularly with discovery that we're doing as we go through. We haven't disclosed what% of the lineup. I'll just tell you it's a subset. We're not planning to take everything down. We're planning to test, just like we did with the skin tints, where does it make sense as we go through. Then in terms of lapping the price increase last year, a lot of what we're doing in terms of the actions that you've heard us talk about, both the price discovery as well as incremental innovation into this year, are really aimed at driving greater unit growth and utilizing the $58.5 million of tariff refunds that we're going to be able to get to continue to drive higher unit growth. As Mandy said, the forecast we put out or the outlook we put out is the floor. We feel there's upside on top of that, and we'll use the same approach we've always used, which is quarter- by- quarter, update that guidance based on the momentum that we're seeing. Sure. As we think about the broader environment, like you said, consumers are stretched. They're making difficult everyday choices. I guess, how do you know that the relative price points were the main issue here in terms of volume growth, and that cutting price was the right solution? I guess, looking at your prices, even after you took $1 incrementally last year, you were still cheaper than other mass peers in this space. Why is cutting price the right solution currently? We are always modeling both competitive set as well as our own items and how they're doing. We see some items that there may be an opportunity to have even a sharper price on. It's as simple as that, we've always done that in a way where we've always looked at, particularly on our innovation mix, what are we going to go out the door with? What really drives a screaming value? What we're most known for is our ability of taking prestige quality or inspiration from prestige to our community, putting our e.l.f. twist and bringing it at a great value. We feel really good about the innovation that we have coming out in our fall innovation. Some of that is already started to plant online. They will hit retailers in the next month or so as we go through, and many of those have that clear frame of reference to prestige. This is what we normally do, which is really making sure we deliver superior value to our community, and that's actually been one of the key drivers. Okay. e.l.f. isn't a brand historically to take promotional pricing. It's more of a driver of volume growth for other mass peers in this space. Curious what you're seeing now on the promotional environment with competitors on pricing. Then as consumers seek the best value, where are you seeing the most traction with your brand in this more challenging consumer environment? Is there any pickup with particular retailers, such as Dollar General versus the mass side, where we've seen more weakness? I would say from an overall consumer standpoint, consumers are kind of under threat from inflation and other issues. The reality is we will continue to have a superior value proposition. As you mentioned, the difference between us and our competitor is pretty great. The discovery we're going to do is allowing us to do even sharper pricing, and our strategy is an everyday low price. We don't do the promotional support that a number of our competitors do. I wouldn't say we've seen a pickup in promotional support, necessarily. That's always been a strategy for a number of our competitors, a lot of high-low, a lot of different promotions. We've been able to prove over many, many years that having a great everyday value is a better proposition, and so that's what we're really focused on. Right. As we've seen, other companies have been talking about lower income consumers being under pressure, potentially rolling back prices. How does this affect the broader e.l.f. brands, and how are you thinking about the cosmetics category more broadly from here? Yeah. Go ahead. I was going to say, the great news about our portfolio that we've built is that, if I think about the e.l.f. brand, we have consumers across income cohorts. Certainly want to make sure that we're watching what's happening with the lower income consumer. If you think about e.l.f., e.l.f. brand, rhode, Naturium, certainly have consumers across income cohorts. We want to make sure that we're there for every, and certainly some of this price discovery that we're doing will help, from a value perception standpoint. We want to make sure that we're thinking about all consumers as we go through. The great thing is we're not just there at the lower income. We do have consumers across those cohorts. Yeah, building on that, if you take a look at the strength we have from a consumer standpoint, we're by far the number one brand amongst Gen Z, Generation Alpha, and Millennials. That strength is across all income cohorts. That strength we continue to see. We continue to see excellent results on our brand health metrics, continue to build awareness, continue to see that momentum. This is just one of the core pillars that we look at between value, innovation, and marketing, and they all three work together. Right. You talked about innovation in fiscal Q1 as not contributing the same lift as it had in the past. Was wondering if there were any specific verticals where you feel the innovation fell short, and do you think this is part of the e.l.f. brand slowing down on growth, or do you see this as potentially more temporary in nature? We definitely see it more temporary in nature. We have had a consistently strong track record on innovation. If you take a look each year, we have some of the strongest launches across the entire cosmetics and skincare categories. Even this year, while innovation is lower than our expectations, we already have two of the top 10 launches. If I look at our lip oil sticks, they're off to an incredible start. We continue to see great momentum on our Glow Reviver Melting Lip Balms as we go through. I'd say a couple of the ones that we were hoping for higher results, one example being our Soft Glam concealer at $5. We thought that would be more viral than it is. What it's reinforcing is e.l.f. does best when there's a clear frame of reference on a prestige equivalent or inspiration from our community. If you take a look, that's exactly what the lip oil stick is doing. It's priced at $10. The only other thing like it in the marketplace is a prestige item at $48. You take a look at the melting lip balms. Again, it's one of those where it's $9 relative to prestige items well over $20, $24, or $26. As the innovation coming up in the fall, we've already started planting some of that innovation. We're seeing actually incredible virality already in some of the innovation that's coming in the fall. Our dual-sided brush, consumers immediately got like, "Hey, this is $9." The only other thing like it is a prestige item at $36. If you take a look at our blush and bronzer sticks, which we also just put online, they're at $7 versus a prestige item at $34. Our quad palettes at $12, the only other thing like it in the marketplace is at $64. I think Mikayla just did a review just yesterday just talking about that. If you just look at, I think all three of those items, Mikayla did reviews on, but so did a number of other influencers. We feel really good, particularly making sure you have those items that have clear frames of reference. Sure. With that in mind, where you're looking for innovation that does have a clear frame of reference, how should we think about the innovation that's brought forward to fiscal 2027? Are these products that you think consumers are looking for in the marketplace right now? How should we think about the pricing on these new products, given some of the cuts you're making across existing product lines? That's also one of the areas where your advantage is being able to look at our community, see what they're most interested in, and bring them to market quickly. We're able to accelerate some innovation into FY 2027 that wasn't originally on the pipeline for FY 2027, mainly based on the strength that we're seeing from a consumer standpoint. We're not disclosing what that innovation is just yet, but what I can tell you is they happen to be items that are quite big from a consumer standpoint. We can see the size of what those look like, and we'll be offering them at an incredible value of what we're known for. Relative to, I'd say it doesn't really impact, or it doesn't really have anything to do with the pricing discovery that we're doing right now. That is on our core items, certain numbers of our core items, where we say, "Is there an opportunity to drive even greater unit volume through price discovery?" Innovation is always based on the relative comparison and making sure we're driving a great value as we go through. Right. We've spent some time talking about the challenges that you've seen from both a value and innovation standpoint, more broadly, isn't competition just getting more challenging? What gives you the confidence here that e.l.f. brand hasn't just reached a peak of growth or plateaued at this point? No. I would say there's nothing unusual from a competitive standpoint. There's always a lot of competitive activity in our space. We've talked before, there's 1,800 cosmetics and skincare brands across these categories. Very few have been able to scale. We happen to have four brands out of the 14 that have got more than $200 million of retail sales. Every one of our brands is strong, every one of them is growing, we feel good that way. I think the context I'd give you in terms of this question on maturity or competitive context is, we shared in our earnings last time, if you look over the last few years, I think the e.l.f. Cosmetics brand has built over 900 basis points of market share. The next highest brand during that same period is a little bit over 200 basis points of market share. Most of the other brands that we compete in, some have had pretty significant share losses. Even L'Oréal and Maybelline are kind of flattish during that multi-year period. There will be certain periods where you'll see, for example, you'll have a year where L'Oréal Paris is up, and Maybelline is down. You have another year where Maybelline's up, L'Oréal Paris is down. It's the normal noise in the category. We're less dependent on competitive activity and more dependent on the core fundamentals that have driven our business, which is value, innovation, and disruptive marketing, and we feel good about the plans we have coming in all three of those areas. Sure. The last thing I would tell you from a share standpoint, because I think it's often missed, is yes, we have a 13% share nationally, and that's I think number one in units, number two in dollars, that 13% share. If you look at Target, which is our longest-standing national retail customer, we've got 21% of their category. The only difference between Target and everyone else is they have a five or six-year head start. As we map the trajectories by customer, we still have massive opportunities across the board in terms of share growth. Great example being Walmart. We were recently cited as the only beauty brand to be nominated for one of their Excellence in Experience awards across the entire chain. That was really due to the thought leadership we had on their new beauty vision and their highest vision sets within beauty. They're anchoring their new beauty sets with e.l.f. lead position with more space. We love what we're seeing, Walmart loves what they're seeing in the results from those sets. Those sets have only rolled out in, I don't know, out of their chain of 5,000 doors, I think they've only rolled out in a subset. We still have a long way to go as just one example of where we continue to see opportunity by every one of our retail customers. I would put Target in that list as well. Target has long stated that they want e.l.f. to be their first billion-dollar beauty brand. We're about halfway there, so we still have a long way to go even within Target relative to their internal objective. That's very helpful. You'll be lapping the acquisition of rhode pretty soon in August. Could you talk about your expectations for growth for rhode with the lapping of the Sephora retail launch, given that was before you closed on the acquisition? Yeah. We feel great about rhode. It's phenomenal. Sorry, Mandy, were you going to- No, go ahead. I was going to stay the same. It has far exceeded everyone's expectations. Our own expectations, and we had pretty aggressive expectations as part of underwriting that acquisition, but also Sephora's expectations. It was the biggest launch Sephora North America, Sephora U.K., and Mecca, Australia and New Zealand have ever seen by multiples relative to any other launch they've ever done, and we've continued to see very strong momentum even after launch. rhode is the number one brand across Sephora, and even in North America if you look at our position in North America, we're the number one brand. Often that's done out of one bay relative to competitors who have two or three different bays. We have a long way to go even within North America. In addition to that, we did mention that we're very excited about rolling out rhode in 19 countries with Sephora in Europe. That launch is coming up in the fall here. We feel really great about the growth trajectory that we not only achieved on rhode, but where we have to go. Final context I'd give on rhode is we mentioned in our fiscal year, it's at an annual rate of fiscal 2026 was $390 million of net sales, which is pretty phenomenal. That is in less than 20% of Sephora stores globally. rhode has tremendous potential, and we're really excited about the plans we have for it. That's very helpful context. Wanted to also ask on the Sephora rhode expansion that you mentioned in continental Europe. Was wondering if you could talk about how many doors you'll add with that expansion, and then how large this will be compared to your current footprint. Yeah. I don't know if we've disclosed how many doors, but I think it's a full rollout in the 19 countries where Sephora operates. Like Tarang said, very excited about the fall launch, and what's to come. rhode has exceeded expectations with every launch that they've done, and so looking forward to see how that comes together this fall. Yeah. It's a big launch, Anna. We haven't given the store count. You can go look up the store count of Sephora in Europe, and you'll get a pretty good sense there. It is a big launch, and Sephora is quite excited. If Sephora had their way, they're going to put rhode in every single Sephora around the world. We stick to our strategy of disciplined rollout, which is the same way we've done e.l.f. over time, where you have a sequential rollout, make sure that you have excellence in execution, and that you continue to build that. That includes in North America, the U.K., Australia, New Zealand, as well as in Europe, and there will be additional markets after that. Great. Looking forward to that. When rhode launched, it was often compared to other celebrity-focused brands. I was wondering how you now see that comparison holding up or maybe not holding up as well. Who do you view as your main peers in this space for rhode currently? Well, I think that's one of the fallacies on rhode. Yes, Hailey Bieber is a celebrity, she's so much more. She's one of the most thoughtful founders I've ever met, I meet a lot of founders. She has incredible instincts, a beautiful aesthetic, real pulse on the community and product. She's absolutely meticulous when it comes to product. It's an incredibly well-curated line that ties to her lifestyle. The brand can continue to go. There isn't any other brand like it. It'd be wrong to try to compare it to a celebrity brand. We've already blown away any expectation of any celebrity brand we've seen to date, because it's much more than that. It is a brand that really absolutely resonates with the communities that we serve, you continue to see that strength from a consumer standpoint as we go through. The example that I give there is the continued build we see in rhode month after month, even in our launch markets that we've already launched into, which shows the strength, and we still have a long way to go. I think one of the things we talked about on rhode is, it is accretive to the margin structure of the company. It gives us the ability to invest more in rhode. That's already been incorporated into the guidance that we've given to be able to continue to drive innovation, continue to shine a light on the incredible innovation that we have. We feel really good about continuing to drive this brand for the long term. Great. rhode continues to innovate, adding more SKUs, but in a very deliberate way. Was wondering if you can talk about how rhode's category expansions are going. They're doing an incredible job from an innovation standpoint. As Tarang mentioned, that connection to the community, Hailey is very much focused on what is the community asking for as well, and she does a great job of teasing that innovation that's coming. You're certainly going to see more on the innovation front as we get through the summer. They always do some fun things there. In addition, the innovation that's already launched, for example, the spot wear that was launched just a month or so ago, those items still have to make their way into retail. You'll start to see those show up in Sephora as well. Always launching first on rhodeskin.com, but eventually making their way into retail as well, which is another opportunity. One of the great signs on the innovation is each subsequent wave of innovation is the biggest wave we've ever had. It talks about the momentum of this brand and how it continues to build. Every launch we've had has been the next record holder in terms of launches and what we see, and we feel great about the pipeline. As you mentioned, it is highly curated. This is not a brand that we believe in SKU proliferation on. It really does tie to, and the meticulousness of the product, of her meticulousness in terms of the development of these products. I mean, rounds we go through to be able to really make sure it's something that our community absolutely will love. Right. You've made some inroads on the international expansions. Now with continental Europe, I guess, and expanding into 19 additional countries, what gives you confidence that you're not expanding rhode too quickly internationally? I would say the team has been very thoughtful about the expansion of rhode. Like Tarang said, if Sephora would have rhode in every single store across the world today, the team is being very thoughtful on that approach. You saw us kind of take North America last year. We have Europe this fall, and there will be additional countries as we move forward. Being very mindful of growing the brand, being able to cycle that growth as we go into the following year, and they've done a great job with those plans. Yeah. All you have to take a look at is each subsequent launch. If you take a look at the North American launch, obviously, that was a really successful launch. What we were able to do in the U.K. was unlike anything they've seen. Mecca was probably the best launch we've seen to date in terms of the absolute activation. The team continues to get stronger as we go from one launch to another, and we have really big plans within Europe, and we are highly confident of our ability to execute that with excellence. Okay. Well, staying on the international theme, could you talk a bit about your expectations for growth on the international business for the core e.l.f. brand? How do you think about your growth in terms of the fiscal 2027 guidance for core e.l.f., domestically versus internationally? Yeah. What we've said about our international on the core e.l.f. is that it's really going to be a two-prong approach as we move forward. One, focusing on driving the productivity that we want to see in those existing markets. If you recall, our largest markets are Canada, U.K., and Germany. We're going to continue to focus on how do we get better in our existing markets while selectively launching in new markets as we move forward. Again, the team has done a great job of really thinking through how do we do that most succinctly. As you think about international growth on the core e.l.f., we haven't given a number on that, but we did say on the call that our trends are moving in the right direction from both the U.K. and Germany, where we had some pressure last year. We obviously opened dm in Germany. That's given additional momentum to that market, which is great to see. I think you're going to see us, as we go throughout this year, really focused on that two-pronged approach. Great. Thinking about some of your other brands as well, you focused on expanding Naturium into Walmart, which is in the emerging brands part of the beauty section within Walmart. The growth there so far has really been phenomenal. In terms of further expansion, where do you see the Naturium brand going next, and where do you see it sitting on the shelf longer term in skincare? Massive potential on Naturium. We mentioned in the call, it is the fastest-growing skincare brand amongst the top 50 skincare brands, so it has incredible momentum. We've already more than doubled the business in the three years since our acquisition, and we continue to see big momentum. Right now, you mentioned at Walmart, we just got into the emerging brands section. We think longer term, Naturium belongs both in body and in facial skincare, is really the presentation that we have both at Target and Ulta Beauty, which continue to have great momentum. Walmart's still early days. We still have full chain to do at Walmart. We're just in a subset of doors right now, and they're very pleased with the results they see. You'll continue to see additional expansion on Naturium over time, not only in its existing footprint in the U.S. or existing customers in the U.S. with Walmart, Ulta, and Target, but new additional distribution as well. In this past year, we really had a pretty big launch in Boots in the U.K. We've already expanded space in Boots in the U.K. We've always had a strong presence in Space NK. We took Naturium into Sephora in Australia and New Zealand as well, and you'll continue to see other markets. We like the strategy on Naturium, where you're seeing real momentum and strength in our existing retailers and the ability to selectively expand it into additional markets and retailers. Great. I wanted to move down the P&L a little bit, spend some time talking about margins. In terms of COGS, you've been expanding manufacturing outside of China. Wanted to know now, where are you at in terms of your manufacturing split in China versus outside of China for the e.l.f. core products? Have you made any changes to your manufacturing footprint otherwise to rhode and Naturium since you've made those acquisitions, or are those manufacturing capabilities largely intact? We've continued to have great diversification in our supply chain. Frankly, it has less to do with tariffs and more to do with meeting the global demand we see for our brands. As context, if you back up a few years ago, almost 99% of our production was done in China. Today, over 45% is outside of China, and that percentage will continue to increase. It's a combination of two things. One is we continue to expand the portfolio. If you look at the main production sites for rhode are in Italy and South Korea. Naturium is mainly in the U.S. In addition, we continue to take our leading strategic suppliers and set up operations outside of China as well. We recently, one of our biggest suppliers, we opened up a brand-new facility in Thailand. The advantage of that is we're able to leverage the expertise of our strategic partners, the exact same kind of unit operations and equipment, same advantage that we have in another market. I feel really good about the footprint. We've continued to evolve the footprint across the entire brand portfolio. Naturium's footprint has increased over time, rhode's as well, and certainly on e.l.f. We haven't stated a percentage in terms of what percent we believe will be outside of China. China will still have an important role. We have a major advantage when it comes to cost, quality, and speed, but being able to replicate that advantage in other markets, is really the strategy that we're working. Sure. Now with rhode and Naturium, where do you stand on manufacturing since those acquisitions? Yeah. I'd say, total manufacturing, including rhode and Naturium, is a little bit over 45% outside of China. You're going to continue to see growth in that footprint, particularly given the growth aspirations we have behind our brands and the momentum we have behind them. Okay. In terms of margins, rhode is certainly margin accretive. Where do you see margins moving forward with the expansion of rhode, kind of coupled with those certain pricing reductions that you're making on the core e.l.f. brand? Are we largely ending up here in the same place as we were before, given that you've got some benefit from rhode and then some decrease in margin based on the pricing reductions you're making? Further, how should we think about some of the near-term implications, potentially with higher oil prices, and tariff rates versus your potential for tariff refunds? Yeah. rhode, and let me start there. rhode, even with the investments that we've made behind the brand, continues to be accretive from an adjusted EBITDA standpoint. Even with the gross margin that we talked about for this year, as I go deeper into retail, you will see gross margin kind of shift around for rhode, but still expect them to be accretive from an EBITDA margin standpoint. If I take a look at the total company, we've outlooked a 20 basis point increase in adjusted EBITDA for this fiscal year. That is really just getting back to this cadence of incremental progress from an adjusted EBITDA standpoint. I think with last year with the tariffs and all the things happening, we were not able to deliver on that, but certainly expect to for this fiscal year. In terms of those near-term implications, when I think about the rising prices on the oil front, we see that as a transitory thing, as the things evolve with the war in Iran. We will have the tariff refunds as an opportunity to help offset that within the fiscal year. Certainly, don't see that as a headwind that would cause us to kind of take a step back from an EBITDA standpoint. Those refunds should help to support some of that inflationary pressure that we're seeing there, in addition to helping us on the unit volume growth standpoint, as Tarang spoke to earlier. Right. As we think about the tariff refund, how do you plan to treat that in the income statement? Is this a one-time item that will get adjusted out? If not, is this partially offsetting a price reduction in certain SKUs that you've talked about? If price cuts remain in fiscal 2028, does that continue to temper your expectations farther out on earnings? Yeah. The tariff refund, we expect to help to offset some of those cost headwinds that I just talked about. We certainly see it as a one-time thing. We're not going to adjust it out of EBITDA. Instead, we want to see what we can do from a unit growth standpoint. How can we kind of use this to drive more consumers back into the e.l.f. brand this year and continue that momentum into fiscal 2028? You're going to see us kind of pick our spots where we want to kind of spend this refund, whether that's in value, as we've talked about, some of these price discovery initiatives or tests that we're doing. Some will go to fund that. We're going to look at marketing. Is that another area that we can invest behind, marketing and our innovation, and get that messaging back out to our consumers to kind of drive that unit momentum. You're going to see us kind of, as those tariff refunds come in, allocate that to different parts of the P&L to help drive momentum behind the e.l.f. brand. Yeah. You know what I'd add there is, we've seen some of the commentary on gross margin. It's a little perplexing for us. We feel great about our gross margins. We have a great structure. I think people are getting confused on price discovery. We're talking about a subset of our line. The tariff refunds are going to more than offset that from a gross margin standpoint. The way the tariff refunds get applied is the same way the tariffs got applied to, which is in COGS. You're going to see the refunds really apply to that line. There's potentially a massive one-time increase in gross margins, but I'd say the overall steady state is great. These investments, the higher oil, et cetera, it is nowhere near the magnitude of where the tariff refunds are. As Mandy said, gives us then the opportunity. Back to one of your original questions of confidence of driving unit volumes. The confidence we have in driving unit volumes really comes from three things. One is the price discovery and the value that we're doing. Two, the innovation, both the fall innovation as well as incremental innovation we're bringing in. The third is using a portion of that tariff refund to really drive, to double down on the things that we see working. We've always had a great track record of when we see momentum in a particular area to go feed that momentum and really drive consumer demand behind it. All three of those things, with the tariff refunds, I think we have the opportunity in terms of how that gets funded and what we're able to drive. I guess, given the messaging, and the price cuts that you're looking to do, for how long do you expect those to last? Is this something that we should continue to expect lasting into fiscal 2028 potentially? What do you look for in terms of reversing those price cuts? What would give you confidence to go back to your original pricing? Yeah. We're going to be looking at the unit velocities that are driven. With the Halo Glow Skin Tint example, we saw a lift in units, and so we expect to see a lift in units. That's what we'll be watching, that's what we'll be tracking. If we do see the lifts that we expect, we would plan to keep those prices at those levels on a permanent basis. We are going to be testing that throughout the summer. I've seen some people already start to write about what they're seeing out there, but again, a subset of SKUs allows us to do some discovery on price, and if we see the response that we expect, we would plan to keep those in place. Got it. I think there's been the expectation for some time that you would expect some SG&A leverage on the marketing side. You're guiding to marketing spend at 23%-25% of FY 2027 net sales, it's broadly in line with your FY 2027 marketing spend of 24%. I was curious what the return is that you're now seeing on the marketing side here, given you continue to spend a sizable amount of net sales on marketing. Yeah. We continue to see strong ROIs on our marketing spend, which encourages us to keep that marketing spend at those higher levels, the 23%-25%. We like that range. To your point, at the midpoint, that's exactly what we spent in fiscal 2026. Just want to continue to pull that as a lever because when you think about the things that make e.l.f. special, it's our value proposition, our innovation, and our disruptive marketing engine. We want to make sure that we continue to fuel that, because that creates that connection to community, creates those cultural moments where we are present, just like we were with SURVIVOR, just a week or so ago. You're going to continue to see us do really special things from a marketing standpoint. In terms of leverage on SG&A, what we called out this year is seeing about 20 basis points of leverage on overall SG&A. Whether that comes from marketing or whether that comes from other parts of SG&A, we still are pleased with that 20 basis points. Making progress from a leverage standpoint. Great. I think incorporated into your fiscal 2027 guidance is also this expectation to thoughtfully invest in non-marketing SG&A, with your team and infrastructure to continue to go after white space opportunities. What do you see here now as the most attractive white space opportunities for this investment, more in the near to medium term? Would this be expanding into different verticals such as fragrance, continued retail expansions, combination of these factors? What do you see as the most prudent opportunities now? Yeah. When we talk about investments in team and infrastructure, really that has been behind the areas that we see the most growth potential. If you think about international as an opportunity, we've continued to build that team and want to make sure that even from a retailer standpoint, we're showing up in the best way, whether that be our fixturing and visual merchandising. Those are definitely investments that you're going to continue to see us make, as we support that growth that we want to see. In terms of verticals, we've done some testing. We did the Power Grip test with the hair gel. That was very successful. We did a collaboration with H&M on the fragrance side, certainly taking some of those signals as opportunities to see where else could we potentially stretch the e.l.f. brand over time. We've seen the e.l.f. brand is highly elastic. There hasn't been a category that we've tested so far that e.l.f. doesn't belong in, but it's going to be that disciplined rollout strategy we have. We still have a massive opportunity in skincare through the fastest-growing skincare brands, between e.l.f. SKIN, Naturium, and rhode. We want to make sure that we do that the right way. Then in terms of a little bit of your piece of cash priorities, our first priority is we see tremendous growth ahead. I don't know of any company that has all five of its brands growing at a fast pace, and all having a lot of white space. That's our first priority. Now, having said that, we also see a disconnect right now between the stock price and the fundamentals of the business. I don't even know that many consumer companies that are putting out guidance, even initial guidance, at 12%-14% net sales growth yet. We obviously see the stock way down given recent trends in the e.l.f. brand. We did take the opportunity this week to purchase another $50 million of e.l.f. stock. We have an original authorization of half a billion dollars. I think we've now gone through about. $150 million, mm-hmm. $150 million of that authorization. We still have more authorization. When we see disconnects like we're currently seeing right now, we will use cash that we have on hand in that regard. Again, it will be a balance. Our first priority's always going to be to invest behind the growth that we see, and the potential we see long term behind our brands. We will also take advantage, and we have the authorization to take advantage of when we see disconnects as we're seeing right now. Great. Mandy, you mentioned you've launched into hair. Is that a signal that you're looking to other categories for growth? How should we think about the opportunity for e.l.f. to expand into different categories like fragrance and hair? Yeah. Well, you just heard us say e.l.f. has permission to enter any category that our community has seen and asked for. That's why we like to test and learn as we go through. I think our test with the Power Grip hair gel was very successful. Sold out right away. A lot of positive sentiment there. I think you guys are going to just have to wait and see. I wouldn't go and pencil in these categories and start measuring that into your models at this point. We're testing our way into these, and to potentially into some of these categories, just to see the consumer response. Yeah. I'd say, look, our laser focus right now is getting the unit growth up on e.l.f. Cosmetics and e.l.f. SKIN. The e.l.f. brand is where we're really focused on, and in our core categories. We see a ton of potential, including continued market share gains over time, our ability to get to clear number one. That objective has not changed. We're absolutely focused on that. The actions we talked about are really focused against that in terms of value, innovation, and marketing. That is the primary focus by far. We will have additional categories that we can expand into, but we'll decide the right cadence and the right way of doing those. Right now, I want to make sure everyone gets that that's absolutely our focus, while continuing to realize, and I think right now, because of where the e.l.f. Brand is, we're getting zero credit. I think people are somewhat blind to just how phenomenal the growth on Naturium and rhode is as we're going through, and we get it. We know what our job is, show the higher unit volumes on e.l.f., then all of a sudden, I think people can wake up and kind of say, "Oh my God, this is a great company." Again, I've got that perspective of the last time the e.l.f. brand went through a slow period was 2018. There are a number of people probably on your call today that wish they got into this stock in 2018. You've seen that strategy and that focus on value, innovation, and marketing has been consistent for seven consecutive years or 29 consecutive quarters. We know what drives this business. It doesn't have anything to do with the noise of the external environment, doesn't have anything to do with competition. It has to do with our ability to execute what we know what we're capable of, and that's what we're really focused on. Helpful. Thank you so much. Few last questions here, but wanted to touch on the broader portfolio of brands, as you mentioned, rhode, Naturium. You've done some portfolio reshaping with the recent transfer of the Keys Soulcare brand back to its founder, Alicia Keys. Can you talk about your decision-making process on this? Sure. I'd say it's twofold. One is Alicia has a tremendous vision for Keys Soulcare. This allows her to be able to follow that vision. It allows us to focus on the five growth brands that we have, that have significantly more scale and incredible white space ahead of us. It's a normal part of any strategy process as we go through. You're always looking at your portfolio and saying, "These are the five brands that we really see tremendous potential in." It allows, at the same time, supporting Alicia to be able to help realize her vision on Keys Soulcare. She has a very broad vision for that brand, and so it allows that and allows us to really realize the potential we have in our existing portfolio. Great. Now that you're approaching the one-year anniversary of the rhode acquisition, how are you viewing the M&A environment? Looking back, rhode was a transformative acquisition because it expanded e.l.f. Beauty's parent company into prestige beauty for the first time. Would you consider a larger acquisition in the near term, perhaps something more transformative in nature? No, I think our clear focus right now is, I say no from a transformative acquisition or a really large acquisition standpoint. Right now, the focus is really getting the unit share, unit growth up on e.l.f., the main brand, realizing potential. We have so much white space on the e.l.f. brand. I think people are missing that right now in terms of, just do the math, 13% share to 21% share is what we're focused on from a share objective long term on e.l.f. color. e.l.f. SKIN is still very much in the early days. Went from the number 25 position to the number 11 position. Still have a long way to go in terms of the footprint of that brand. Naturium, as I mentioned, is the fastest growing skincare brand in the top 50 right now, and rhode is just a phenomenal brand that has incredible upside. That's what we're primarily focused on. Now, we have a strong balance sheet. If we saw another Naturium or rhode, we would acquire it, but it's a pretty high bar that we have, not only a pretty high bar, an exceptionally high bar. It has to meet our vision, the financial criteria that we have in terms of strong growth, not only in the top line, but also strong margin profile, team and culture, and being a fellow disruptor. That weeds out the vast majority of potential targets. I'd say first focus is realize the organic growth and the strength that we have, execute with excellence what we're capable of. Then, we're always looking and seeing different things. Again, if the criteria for us or the bar that would be set is, do we see another Naturium? Do we see another rhode? Quite frankly, there are very few, if none, of those. Great. Well, that's very helpful. I think with that, we're just about out of time. Thank you so much, Tarang and Mandy, for joining us. We really appreciate your time today. Thank you for having us. Thanks for having us. Thanks so much. Have a great weekend.