e.l.f.(US:ELF) GlobeNewswire News Room·2025-03-26 19:34Core Viewpoint - Faruqi & Faruqi, LLP is investigating potential claims against e.l.f. Beauty, Inc. due to allegations of misleading statements and inflated financial metrics, with a class action lawsuit deadline set for May 5, 2025 [4][6]. Group 1: Allegations Against e.l.f. Beauty - The complaint alleges that e.l.f. Beauty and its executives violated federal securities laws by making false and misleading statements regarding rising inventory levels and sales performance [6]. - It is claimed that e.l.f. Beauty falsely attributed rising inventory levels to changes in sourcing practices rather than declining sales [6]. - The company reportedly inflated revenue and profits over several quarters to maintain investor confidence, which ultimately overstated its business and financial prospects [6]. Group 2: Impact of Muddy Waters Report - On November 20, 2024, Muddy Waters Research published a report alleging that e.l.f. Beauty had materially overstated revenue over the past three quarters [6]. - The report indicated that management recognized issues with growth narratives as inventory levels increased, leading to inflated revenue reporting [6]. Group 3: Financial Outlook and Adjustments - On February 6, 2025, e.l.f. Beauty revised its fiscal 2025 net sales growth expectations to 27%-28%, down from a previous guidance of 28%-30% [7]. - The adjusted EBITDA guidance was also lowered to $289-293 million from $304-308 million, influenced by the updated sales outlook and a $7 million foreign currency loss [7]. - The company anticipated net sales growth to be between -1% to +2%, reflecting softer consumption trends and slower-than-expected new product performance [7].