Learn Italian: È lei.

In Italian, you usually drop the subject pronouns (like "I", "you", or "it") because the verb itself tells you who or what is doing the action. Here, è means "is", and the "it" is just understood!

Why does è have an accent mark?

The accent mark changes the meaning entirely. È with the accent is the verb meaning "is", while e without the accent means "and".

The translation says "her", but doesn't lei mean "she"?

Yes, lei is the subject pronoun "she". English often uses the object pronoun "her" in sentences like "It's her", but Italian uses the subject pronoun. So literally, this sentence works out as "(It) is she".

Could this sentence also mean "It is you"?

Yes! In Italian, the formal word for "you" is Lei (usually capitalized). If you were speaking politely to a stranger or a professor, È Lei would mean "It is you".