e.l.f. Beauty Stock Dives After Q3 Sales Miss: Retail Sees Opportunity To ‘Buy the Dip’

Shares of e.l.f. Beauty Inc. fell more than 26% in pre-market trade on Friday after the company’s third-quarter earnings that fell short on EPS estimates, but retail sentiment firmly positive.

For the third quarter, e.l.f Beauty posted EPS of $0.74, missing estimates of $0.76, according to Stocktwits data. Revenues came in at $355.32 million, beating Wall Street expectations of $330.4 million.

For Q3, net sales increased 40% to $980.9 million, primarily driven by strength in both retailer and e-commerce channels, in the U.S. and in  international markets. Its SG&A expenses increased $220.7 million to $584.9 million, or 60% of net sales. The increase was prompted by a rise in marketing and digital spend, compensation and benefits, operations costs, among other expenses.

e.l.f. Beauty also lowered its fiscal 2025 outlook. e.l.f. Beauty now expects earnings per share between $3.27 and $3.32, compared with the previous guidance of $3.47 and $3.53.

“We believe we are still in the early innings of unlocking the whitespace we see across digital, color cosmetics, skin care and international,” Tarang Amin, e.l.f. Beauty’s chairman and CEO, said.

Adjusted net income is now projected to $193 million-$196 million compared to the earlier forecast of $205 million and $208 million.

“Given softer-than-expected trends in January, we are taking a prudent approach and lowering our outlook for the final quarter of our fiscal year. Our updated outlook for fiscal 2025 reflects an expected 27-28% year-over-year increase in net sales, as compared to an expected 28-30% increase previously,” said Mandy Fields, e.l.f. Beauty’s CFO.

Sentiment on Stocktwit remained ‘extremely bullish’ while message volumes continued in the ‘extremely high’ zone.

As of December 31, 2024, e.l.f. Beauty had $73.8 million in cash and cash equivalents and $154.1 million of long-term debt.

According to a poll on the Stocktwits platform, a majority of retail investors see the stock price fall as an opportunity to “buy the dip.”  

E.l.f. Beauty sells cosmetics and skin care products under the brands e.l.f. Cosmetics, e.l.f. SKIN, Keys Soulcare, Well People and NATURIUM.

e.l.f. Beauty stock is down 30% year-to-date.

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