e.l.f. Beauty’s stock tumbled more than 20% in extended trading after the company slashed its annual sales and profit forecasts, citing weakening demand in the mass beauty sector.
The cosmetics brand now projects annual revenue between $1.30 billion and $1.31 billion, down from its prior estimate of up to $1.335 billion. Profit expectations were also lowered to a range of $3.27 to $3.32 per share, compared to the previous forecast of $3.47 to $3.53 per share.
CEO Tarang Amin attributed the revised outlook to softened demand in the mass beauty market, particularly in January, and slower-than-anticipated launches of new products. The company’s core Gen Z audience is grappling with economic and political uncertainties, including concerns over TikTok’s future, which could impact brand engagement.
Adding to the challenges, the 10% tariff on Chinese imports may lead to price hikes, as 80% of e.l.f.’s products are manufactured in China.
Despite the obstacles, e.l.f. reported a 31% jump in Q3 sales to $355.32 million, surpassing analyst estimates of $329.67 million. However, the combination of economic headwinds and sluggish product rollouts has tempered the company’s revenue outlook for the fiscal year.
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