Core Insights - e.l.f. Beauty, Inc. (ELF) has experienced a significant decline in share price, dropping 37.9% year-to-date due to investor concerns over slowing organic growth, margin pressures, and a challenging outlook [1][7]. Performance Comparison - e.l.f. Beauty has underperformed compared to the industry growth of 10.3%, the Zacks Consumer Staples sector's decline of 0.9%, and the S&P 500's gain of 19.5% [2]. - Major competitors like The Estee Lauder Companies Inc. and Nu Skin Enterprises, Inc. have seen substantial gains of 40.8% and 52.1% respectively, while Interparfums, Inc. has dropped 37% [2]. Business Challenges - The core business of e.l.f. Beauty has softened, with organic sales turning negative in Q2 of fiscal 2026 due to shipment disruptions and delayed price increases by retailers [3]. - International growth has also slowed, particularly in key European markets, due to tough comparisons [3]. Cost Pressures - Approximately 75% of e.l.f.'s production is based in China, making the company vulnerable to increased tariff rates, which have led to a significant contraction in gross margin [4]. - Despite price adjustments, the company has struggled to fully offset the cost burden from tariffs, which are expected to persist into fiscal 2026 [4]. Operating Expenses - Operating expenses are high, with increased marketing spending and elevated SG&A costs due to team expansion and infrastructure investments, contributing to a decline in adjusted EBITDA [5]. Financial Outlook - Analysts have significantly lowered their EPS estimates for fiscal 2026 and 2027 due to slowing organic growth, higher tariff costs, and ongoing SG&A pressures [9]. - The current Zacks Consensus Estimate for fiscal 2026 EPS is 2.93, down from previous estimates of 3.53 [10]. Valuation - e.l.f. Beauty's forward 12-month P/E ratio is 22.32X, below the industry average of 29.23X, but ongoing margin pressures limit the attractiveness of this valuation [10]. - The company has a Value Score of F, indicating weak value traits compared to peers [10]. Strengths - Despite the challenges, e.l.f. Beauty maintains strong brand momentum and market-leading consumption growth, with the Rhode acquisition contributing positively to growth [11]. - The brand's successful debut at Sephora and rapid e-commerce expansion have enhanced the company's portfolio [11].