Core Viewpoint - The market's reaction to e.l.f. Beauty's management guidance appears overly harsh, despite a significant drop in stock value following the fiscal Q2 report [1][11]. Financial Performance - e.l.f. Beauty reported a 14% year-over-year sales increase to $344 million in fiscal Q2, missing analysts' consensus of $366 million [6]. - Adjusted EPS decreased from $0.77 to $0.68, surpassing the consensus estimate of $0.57 [7]. - Adjusted EBITDA fell by 4% to $146.8 million [7]. - Revenue guidance for the fiscal year is projected to grow by 18% to 20%, reaching $1.55 billion to $1.57 billion, with adjusted EPS expected between $2.80 and $2.85, down from $3.39 the previous year [4]. Market Dynamics - The company expects Rhode to contribute $200 million in revenue this fiscal year, with a $300 million annual revenue run rate, indicating a potential 40% growth [5]. - Organic sales are projected to rise by 3% to 4%, although shipments are expected to be lower than consumption due to previous shelf space gains [5]. Cost and Margin Analysis - Tariffs have significantly impacted profits, with about 75% of products made in China facing an average tariff of 60%, leading to a 165 basis point decline in gross margins to 69% [8]. - Selling, general, and administrative expenses increased to 56% of revenues, up from 53% the previous year, as the company invests in employees and infrastructure [8]. Strategic Outlook - Management plans to increase marketing spending to 27%-29% of net sales in the second half of fiscal 2026, up from 23% in the first half [9]. - e.l.f. Beauty has been a strong growth player in the cosmetics sector, with opportunities for innovation and expansion, particularly with the Rhode brand [12][13]. - The stock trades at a forward P/E ratio of 17.5 and a PEG ratio of 0.3, suggesting it may be undervalued [13].

Core Viewpoint - e.l.f. Beauty's strong sales growth is insufficient to counteract the negative impact of tariffs on profits, leading to a significant decline in share value following a disappointing full-year outlook [1][3][5]. Financial Performance - For the fiscal second quarter, e.l.f. reported a 14% increase in net sales to $343.9 million, marking the 27th consecutive quarter of growth [3]. - Adjusted diluted earnings per share fell to $0.68 from $0.77 year-over-year, attributed to rising operating expenses and a contraction in gross margin [3]. - Gross margin decreased by approximately 165 basis points to 69%, primarily due to higher tariff costs [3][6]. Guidance and Projections - Management anticipates full-year fiscal 2026 net sales between $1.55 billion and $1.57 billion, reflecting an 18% to 19% growth compared to the previous year, but below analysts' expectations [4][5]. - Adjusted earnings per share for fiscal 2026 are projected to be between $2.80 and $2.85, significantly lower than last year's $3.39 [5]. Supply Chain and Tariff Impact - Approximately 75% of e.l.f.'s global production is sourced from China, making the company vulnerable to tariff-related challenges [6]. - The reliance on a China-dependent supply chain has shifted from an advantage to a disadvantage, raising concerns about future profitability [7][8]. Market Valuation - Despite impressive growth, e.l.f.'s shares are trading at a premium valuation, comparable to other growth stocks with sustainable competitive advantages [8]. - The current price-to-earnings ratio is in the mid-forties, suggesting that the stock may be overvalued given the ongoing challenges [7][10].

In my last analysis of e.l.f. Beauty ( ELF ), which was right after the Q1 fiscal report, the market reacted badly. My take at the time was pretty straightforward: e.l.f. was still a good company, but uncertainties were increasing while forward earnings remained atEquity Research Analyst with a broad career in the financial market, covered both Brazilian and global stocks. As a value investor, my analysis is primarily fundamental, focusing on identifying undervalued stocks with growth potential. Feel free t ...

We were uh talking about ELF in the uh morning meeting, the editorial meeting, and most of our time was devoted to Haley Bieber. Um uh most of our conversation that is. What can you tell us about um how hands-on Haley has been and um how promising this this brand is for you.>> Road is an incredible brand and Haley is continued to be involved. In fact, November is her birthday month. And uh if you're following her or wrote on social media, you can see that next week on the 12th, she's going to be dropping li ...

What Happened? Shares of cosmetics company e.l.f. Beauty (NYSE:ELF) fell 32.6% in the morning session after the company reported mixed third-quarter 2025 results and issued a disappointing financial outlook. While its adjusted earnings per share of $0.68 beat expectations, revenue of $343.9 million fell short of analysts' estimates. The main concern for investors, however, was the company's forecast for the full year. Management's guidance for revenue of $1.56 billion and adjusted EBITDA of $304 million, ...

E.l.f. Beauty Inc’s (NYSE:ELF) stock collapse over the past two days didn’t just smudge its own valuation, it also cast a shadow over several consumer and retail ETFs exposed to high-multiple, tariff-sensitive names. On Wednesday, ELF crashed 29%, and Thursday is going even worse for the stock, which is down 36% at the time of writing. Funds like the iShares U.S. Consumer Goods ETF (NYSE:IYK), VanEck Retail ETF (NASDAQ:RTH), and SPDR S&P Retail ETF (NYSE:XRT) all hold companies in similar product categories ...

About this content About Emily Jarvie Emily began her career as a political journalist for Australian Community Media in Hobart, Tasmania. After she relocated to Toronto, Canada, she reported on business, legal, and scientific developments in the emerging psychedelics sector before joining Proactive in 2022. She brings a strong journalism background with her work featured in newspapers, magazines, and digital publications across Australia, Europe, and North America, including The Examiner, The Advocate, ...

BREAKING: Futures Mixed Amid Earnings Movers; Elon Musk Pay Vote Due Futures for the Dow Jones Industrial Average and other major stock indexes rose modestly in premarket action Thursday. Meanwhile, DoorDash (DASH), Duolingo (DUOL)Â and ELF Beauty (ELF) all plunged on the stock market today after posting quarterly earnings. Ahead of the opening bell, the Dow rose 0.1%, while S&P 500 futures gained 0.2%. Nasdaq 100 futures were also up 0.2% in… Related news Get instant access to exclusive stock lists, expert ...

Group 1 - e.l.f. Beauty (ELF) reported weaker-than-expected fiscal Q2 results, leading to a significant decline in its stock price [1] - The company provided a cautious guidance for future performance, which further disappointed investors [1] - As a result, e.l.f. Beauty was among the worst-performing stocks in the market on November 6 [1]

Core Insights - The retailer has refrained from providing guidance in the previous two quarters due to uncertainties related to tariffs [1] Company Summary - The decision to withhold guidance is attributed to tariff-related uncertainties, indicating potential challenges in forecasting performance [1]