Elf Beauty has raised its annual sales and profit forecasts after surpassing first-quarter expectations on Thursday, driven by increased consumer traffic in stores and online for its affordable cosmetics and skincare offerings.
The beauty company, along with others in the industry, continues to benefit from sustained demand post-pandemic. Elf’s low-cost brands, including Naturium, Skin, and Cosmetics, remain popular among consumers, particularly those with tight budgets due to ongoing inflation.
Retail partners like Target, which stock Elf products, have also reported a significant rise in beauty product sales in recent months.
“We’ve observed that while consumers are becoming more selective, they are choosing Elf,” CEO Tarang Amin told Reuters.
Despite this positive outlook, Elf’s stock has declined by about 14% quarter-to-date. Investors have expressed concerns over potential rising tariffs on the company’s nearly 80% finished products manufactured in China, as well as increasing ocean freight costs, among other factors.
CEO Amin noted that if Republican presidential candidate Donald Trump were to win the upcoming election, any increase in tariffs on imports from China would primarily affect the company in fiscal 2026.
Earlier this year, Trump suggested reintroducing tariffs on China if he wins the presidential election in November, with the potential tariff rate exceeding 60%.
“We don’t favor a 60% tariff because it essentially amounts to a tax on American consumers,” Amin stated. He added that the impact of such tariffs would be mitigated by raising product prices and diversifying supply chain operations.
Elf now projects 2025 sales to range between $1.28 billion and $1.30 billion, up from previous estimates of $1.23 billion to $1.25 billion.
The company also raised its forecast for annual adjusted earnings per share to between $3.36 and $3.41, compared to earlier projections of $3.20 to $3.25.
In the quarter ending June 30, Elf reported a 50% increase in net sales, reaching $324.5 million, surpassing expectations of approximately $304.7 million. Adjusted earnings per share came in at $1.10, exceeding the LSEG estimate of 84 cents.
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