The stock of e.l.f. Beauty (ELF) is down 20% after the cosmetics company delivered weak forward guidance.
For this year’s third quarter, the company reported earnings per share (EPS) of $0.68 U.S., which was ahead of the $0.57 U.S. expected on Wall Street.
However, revenue in the period of $344 million U.S. was short of the $366 million U.S. expected on Wall Street. Sales were up 14% from a year earlier.
In addition to the mixed Q3 results, e.l.f. Beauty offered weak guidance, sending its stock down as much as 30% in after hours trading.
Management said that they expect full-year revenue of $1.55 billion U.S. to $1.57 billion U.S., implying 18% to 20% sales growth.
That outlook is below the $1.65 billion U.S. in sales that analysts were expecting.
As for profits, e.l.f. Beauty expects full-year earnings of $2.80 U.S. to $2.85 U.S., which was also below expectations of $3.58 U.S.
e.l.f. primarily sources its make-up from China and has seen its profitability hurt by U.S. President Donald Trump’s tariffs.
During this year’s third quarter, the company’s net income fell by 84% while its gross margin decreased by 1.65 percentage points, all due to tariff costs.
A bright spot for the company is its new deal with Hailey Bieber’s cosmetics line Rhode, which is expected to increase e.l.f. Beauty’s annual sales by $200 million U.S. in the coming year.
Prior to today (Nov. 6), ELF stock had declined 4% this year to trade at $117.83 U.S. per share.
