Core Insights - e.l.f. Beauty, Inc. (ELF) experienced solid top-line growth in Q2 of fiscal 2026, with net sales increasing by 14% due to market share gains, despite profitability pressures from tariffs [1][3][4] - Gross margin contracted by approximately 165 basis points to 69%, primarily due to higher tariff expenses, although pricing and product mix provided some compensation [1][9] - Operating income decreased significantly to about $7.7 million from $27.9 million year-over-year, indicating a substantial contraction in operating margin [2][9] Financial Performance - Adjusted EBITDA for e.l.f. Beauty totaled roughly $66 million, representing 19% of sales, down from the previous year's level, highlighting the impact of tariffs and increased expenses on profitability [2][9] - The company implemented a global $1 price hike on August 1, yet 75% of its product portfolio remains priced at $10 or less, maintaining its value positioning [3][4] Tariff Impact and Future Outlook - Easing tariff comparisons later in the fiscal year are expected to provide margin relief, as e.l.f. Beauty anticipates a lower average tariff rate moving into the next year [4][9] - Despite current profitability challenges due to tariffs, strong demand and effective pricing strategies position e.l.f. Beauty for potential margin recovery in the future [4] Industry Comparison - Coty Inc. reported a 100-basis-point decrease in adjusted gross margin to 64.5%, with tariffs being a significant factor affecting profitability [5] - The Estee Lauder Companies Inc. saw a gross margin expansion of 60 basis points to 73.3%, but also expects tariff-related challenges amounting to approximately $100 million for the fiscal year [6] Stock Performance and Valuation - e.l.f. Beauty's stock price has declined by 38.9% year-to-date, contrasting with the industry's decline of 1.1% [7] - The company trades at a forward price-to-earnings ratio of 32.48, which is higher than the industry average of 26.4 [10] - The Zacks Consensus Estimate indicates a year-over-year earnings decline of 13.6% for fiscal 2026, with a projected growth of 27.3% for fiscal 2027 [13]

Core Insights - Costco is suing the Trump administration to declare tariffs imposed under the International Emergency Economic Powers Act unlawful and is seeking a full refund of duties already paid [3][6]. - The lawsuit is significant as it positions Costco as one of the largest companies challenging the Trump administration's tariffs, with implications for other firms considering similar actions [3][5]. - The urgency of the lawsuit is highlighted by the potential for the tariffs to be "liquidated," which could prevent Costco from recovering the duties if the tariffs are later deemed unlawful [6]. Company Actions - Costco has filed a complaint in the U.S. Court of International Trade against U.S. Customs and Border Protection and other officials, emphasizing the need for a swift resolution [6]. - The company is concerned about the economic impact of the tariffs and is seeking clarity as it prepares its strategies for 2026 [5][6]. Industry Implications - The lawsuit may set a precedent for other companies to file similar suits, as many firms are looking for clarity on the future of tariffs [5]. - The economic consequences of the tariffs are significant, and the outcome of the Supreme Court's ruling could influence the strategies of various firms in the industry [4][5].

Wholesale retail giant Costco has sued the federal government to ensure it will receive a “complete refund” on import duties if the Supreme Court rules against President Donald Trump’s sweeping tariffs. The lawsuit, filed in the U.S. Court of International Trade in New York on Nov. 28 and reviewed by USA TODAY, asked the court to find Trump’s use of the International Emergency Economic Powers Act to impose tariffs as unlawful. Costco, the largest warehouse club operator in the United States, said it has ...

Group 1 - The OECD forecasts the global economy to expand by 2.9% next year, a slowdown from 3.2% this year [1]

Market Volatility and Tariffs - The introduction of new tariffs by President Trump in April 2025 led to significant declines in global stock markets, with the S&P 500 dropping below 5,000 points and European indices like Germany's DAX and France's CAC 40 falling by 10% and 6.6% respectively in a single session [2][3] - The International Monetary Fund (IMF) estimated that a 20% tariff rate could reduce global growth by more than 1% through 2026 and contribute between 0.6 to 1 percentage point to core inflation [3] Company-Specific Developments - Costco is suing the Trump administration for a refund on tariffs, with analysts suggesting it could be a "tariff winner" despite a 2% drop in its stock after mixed Q2 earnings [4] - Costco's stock has fallen less than 1% in 2025, outperforming the S&P 500, which has seen a 15% decline year-to-date [4] UK Pharma Deal - The US and UK reached a deal on December 1, 2025, to establish zero tariffs on British pharmaceutical products, but Britain will pay 25% more for new U.S. medicines [5] - Market reactions to this deal were muted, with shares of UK drugmakers GSK and AstraZeneca showing little change [5] Spain's Defense Spending - Spain faces potential tariffs due to its reluctance to meet a 5% of GDP defense spending target set by President Trump, highlighting the use of trade penalties as leverage for military budgets [7] Federal Reserve Leadership Speculation - Speculation surrounding the next Federal Reserve Chair has introduced volatility into various markets, with expectations of faster rate cuts under a new, potentially more dovish chair [9] Trump Media & Technology Group - Trump Media & Technology Group (DJT) has seen its stock decline significantly, trading near $11 as of November 2025, with forecasts for December ranging widely from $15 to $67.83 [10] Overall Market Trends - On December 1, 2025, U.S. stocks experienced declines, with the Dow Jones down 0.9% and the S&P 500 down 0.5%, attributed to rising Treasury yields and expectations regarding the Federal Reserve [11] - The market remains characterized by volatility driven by political developments and tariff threats, indicating a challenging environment for investors [12]

Low-End Consumer Underperformance; Growing AI Focus in Labor Market Discussions Investors should consider this report as only a single factor in making their investment decision. For Reg AC certification and other important disclosures, see the Disclosure Appendix, or go to www.gs.com/research/hedge.html. Ronnie Walker +1(917)343-4543 | ronnie.walker@gs.com Goldman Sachs & Co. LLC c45a43530f604d12bcb9a82b5aa6b9f6 n With nearly all the S&P 500 now reported, we analyze Q3 company results and management commen ...

Core Insights - Companies heavily reliant on China for product sourcing are experiencing significant gross margin degradation due to tariffs, with micro-cap stocks seeing declines of 50-700 basis points [1] - Despite challenges, two micro-cap companies have successfully adjusted to tariffs through cost restructuring and sourcing diversification, making them appear attractively valued [2] Company Summaries Crown Crafts, Inc. (CRWS) - Crown Crafts specializes in infant, toddler, and juvenile products, with Walmart and Amazon as key customers, contributing 47% and 19% of fiscal 2025 gross sales respectively [3] - In the latest quarter, Crown Crafts faced a 3.1% decline in sales and a 70 basis point erosion in gross margin due to tariffs, yet managed to increase EPS year-over-year from $0.08 to $0.11 [4] - Administrative and marketing costs decreased by 13.6% year-over-year, with further cost savings expected from management's consolidation plan by fiscal 2027 [5] - The stock is trading at 3.2X trailing 12-month EV/EBITDA, significantly lower than industry averages, with a current dividend yield of 11.72% [6] Hamilton Beach Brands Holding Company (HBB) - Hamilton Beach operates in two segments: Home and Commercial Products (74% of total revenues) and Health (26% of total revenues), with Walmart and Amazon accounting for approximately 29% and 24% of revenues respectively [7][9] - The company experienced a one-time 690 basis point hit to gross margin from tariffs but has implemented pricing actions and diversified manufacturing to mitigate future risks [10] - The Health segment's operating profit turned positive, and the premiumization strategy through the Lotus brand has shown strong sell-through performance [11] - A 15.2% year-over-year drop in revenue was attributed to trade paralysis among major retail customers, but there are signs of recovery as trade conditions stabilize [12] - The stock is currently trading at 6.26X trailing 12-month EV/EBITDA, with support around a tangible book value of $11.48/share [13] Market Context - Both companies have significant exposure to consumer spending, particularly through Walmart, which is managing macroeconomic challenges effectively [14]

Canadian steelmaker Algoma Steel Group will let go of 1,000 employees and close its blast furnace in northern Ontario within months as it seeks to stem losses resulting from US tariffs https://t.co/c0DLzAQ5VK ...

President Donald Trump recently took to Truth Social to assert that tariffs have played a pivotal role in enhancing the United States’ economic and military prowess. Trump emphasized that tariffs have not only enriched the U.S. but also fortified its position globally, saying tariffs have made the country "Rich, Strong, Powerful, and Safe." ‘Wars Have Been Stopped‘ He claimed that these measures have prevented wars and bolstered international relations, stopping other countries from taking advantage of t ...

Core Viewpoint - U.S. manufacturing has contracted for the ninth consecutive month in November, driven by declining orders and rising input prices due to ongoing import tariffs [1][2]. Manufacturing Sector Performance - The Institute for Supply Management (ISM) reported that the manufacturing PMI fell to 48.2 in November from 48.7 in October, indicating contraction in the sector, which constitutes 10.1% of the economy [4]. - Some manufacturers linked layoffs to the tariff environment, indicating a shift towards more permanent changes, including staff reductions and offshore manufacturing [2]. Impact of Tariffs - The imposition of 25% tariffs on over $460 billion worth of imports, particularly in the transportation equipment industry, has negatively impacted manufacturing, although some tariff relief has been provided [2][5]. - The Federal Reserve's Beige Book noted that while some districts reported slight increases in manufacturing activity, tariffs and uncertainty continue to pose challenges [5]. Industry-Specific Insights - Only four industries, including computer and electronic products and machinery, reported growth, while sectors such as wood products, transportation equipment, and textile mills experienced contraction [5]. - Chemical product manufacturers indicated that tariffs and economic uncertainty are dampening demand for construction-related products like adhesives and sealants [6].