E.l.f. Beauty Shares Tumble After Weak Outlook Despite Strong Quarter

Shares of e.l.f. Beauty (ELF) tumbled on Friday after the cosmetics and beauty products maker gave a weaker-than-expected outlook after posting a monster quarter.

Disappointing Guidance

E.l.f. Beauty sees full-year adjusted earnings per share (EPS) of $3.36 to $3.41, and revenue in the range of $1.28 billion to $1.30 billion. While those figures were higher than the company’s previous guidance, analysts had been expecting better results.

Strong Quarterly Results

The news offset e.l.f.’s blowout fiscal 2025 first-quarter results. Adjusted EPS came in at $1.10, surpassing the average forecast of analysts surveyed by Visible Alpha by 25 cents. Revenue also soared 50% to $324.5 million, well above estimates.

The company attributed the jump in revenue to strong retail and e-commerce channels, which experienced growth rates of 43% and 105%, respectively. Additionally, gross profit was boosted by higher prices and volumes.

CEO Tarang Amin highlighted that this was the company’s 22nd consecutive quarter of net sales growth and market share gains, placing e.l.f. Beauty in a rarified group of high-growth consumer companies.

Market Reaction

Despite the strong quarterly results, e.l.f. Beauty shares fell more than 14% on Friday. However, the stock remains nearly 12% higher for the year 2024.

Conclusion

E.l.f. Beauty’s weaker-than-expected outlook for fiscal year 2025 overshadowed its impressive first-quarter results. The company’s strong performance was driven by robust retail and e-commerce channels, as well as higher prices and volumes. While the market reacted negatively to the guidance, e.l.f. Beauty remains a high-growth player in the cosmetics and beauty products industry.

Read the original article on Investopedia.