E.l.f. Beauty stock price takes a tumble after the cosmetics brand warns of weaker 2025 demand. Here’s why

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E.l.f. Beauty (NYSE: ELF) saw its stock plunge in extended trading on Thursday after the company cut its full-year guidance. As of premarket trading on Friday morning, shares were down more than 25% to $66.15, lows not seen since 2023. The stock has fallen significantly from its 2024 high of $221.83.

The cosmetics brand posted strong Q3 revenue results, surpassing analyst expectations with a 31.1% year-over-year increase to $355.3 million. Despite stronger-than-expected holiday sales, profits came in below estimates.

Key financial results 

E.l.f. Beauty adjusted its full-year revenue forecast to $1.31 billion, slightly below previous estimates, and revised its earnings per share and EBITDA guidance downward as well. Here are other key takeaways, per consensus estimates cited by CNBC: 

• Full fiscal year guidance: Sales between $1.3 billion and $1.31 billion (below estimates of $1.34 billion). Previous guidance was $1.32 billion to $1.34 billion. 
• Earnings per share: 74 cents adjusted versus expected EPS of 75 cents.
• Revenue: $355 million, compared to $330 million (up 31% from $271 million a year earlier).
• Net income: $17.3 million, or 30 cents per share (compared to $26.9 million, or 46 cents per share, a year earlier),

What’s driving the stock price decline?

Investors are likely concerned about the lower forecast. The company cited the Los Angeles wildfires and speculation about the future of TikTok as factors for a muted start to 2025.

“First, the category continued to decline in January,” CEO Tarang Amin said on E.l.f. Beauty’s earnings call. “We believe this decline is reflective of consumers stocking up in a highly promotional December, and lower social conversation around beauty.” He continued: “Consumer mindshare is focused elsewhere, including wildfires in L.A. and uncertainty around the TikTok platform.”

E.l.f. executives suggested the company was less concerned about President Trump’s tariff increases on Chinese-made goods, which account for most of its production, pointing to a proven strategy from 2019. 

“As a reminder, tariff heights will not impact our current fiscal year results. We plan to address our response to the incremental tariffs in our fiscal 2026 outlook in May,” CFO Mandy Fields said on the earnings call. “We believe we have a successful playbook to leverage from 2019 when tariffs move to the 25% level. This included supplier concessions, cost savings and select price increases.”

CEO emphasizes the positive

Despite the revised outlook, Amin said he remains optimistic: “We believe we are still in the early innings of unlocking the whitespace we see across digital, color cosmetics, skin care, and international,” he said.

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