E.l.f. Beauty's Forecast Disappoints Investors Despite Stellar Quarterly Results
E.l.f. Beauty's shares dropped sharply after the company issued a cautious outlook, overshadowing its impressive quarterly earnings.
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Highlights
- E.l.f. Beauty's fiscal 2025 guidance missed analyst projections, triggering a significant stock decline.
- The company reported quarterly profits and revenues that far exceeded expectations.
- Growth was driven by increased pricing and higher sales volumes.
Shares of E.l.f. Beauty (ELF) plunged on Friday following the company’s release of a less optimistic outlook, despite delivering outstanding quarterly financial performance.
For fiscal year 2025, E.l.f. anticipates adjusted earnings per share (EPS) between $3.36 and $3.41, with revenues projected from $1.28 billion to $1.30 billion. Although these figures surpass the company’s earlier guidance, they fell short of analysts’ expectations.
These cautious forecasts tempered enthusiasm for E.l.f.’s remarkable first-quarter results. Adjusted EPS reached $1.10, surpassing analyst consensus by 25 cents, while revenue surged 50% to $324.5 million, well above estimates.
The robust revenue growth was fueled by strong performances in retail and e-commerce sectors, which grew 43% and 105%, respectively. Higher prices and sales volumes also contributed to improved gross profits.
CEO Tarang Amin highlighted that this marks E.l.f.’s 22nd consecutive quarter of net sales growth and market share expansion, positioning the company among a select group of rapidly growing consumer brands.
Despite a more than 14% drop in share price on Friday, E.l.f. Beauty’s stock remains nearly 12% higher year-to-date in 2024.
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