Elf beauty Seeing a 36% profit in January and a 36% drop of “overexpected” marks one of the hottest brands in beauty is a rare recession, so it cuts full-year guidance on Thursday.
The cosmetics company reported higher-than-expected holiday sales but less profit estimates, another rare mistake for retailers.
Elf’s stock fell more than 20% in Thursday’s expansion trading.
According to LSEG’s survey of analysts, Elf’s performance in the third quarter of the third quarter compared to Wall Street’s expectations:
- Earnings per share: 74 cents adjustment and expected 75 cents
- income: $355 million vs. $330 million expected
The company reported net income Three months ending on December 31 A year ago, it was $17.3 million, at 30 cents a share, while $26.9 million or 46 cents a share. Elf does not include one-time items, including stock-based compensation and natural fees for its acquisition, and ELF released adjusted earnings of 74 cents per share.
Sales rose to $355 million, up 31% from $271 million a year ago.
In the company’s full fiscal year, with only one-quarter remaining, the Elf issued guidance that was lower than Wall Street expected. The retailer now expects sales to be between $1.3 billion and $1.31 billion, down from $1.34 billion, according to StreetAccount. It previously estimated sales between $1.32 billion and $1.34 billion.
Now, the Elf also expects adjusted earnings per share between $3.27 and $3.32, well below the estimated estimated $3.54. The Elf had previously expected full-year earnings between $3.47 and $3.53.
The company’s suggestion guidance for the quarter looked rougher. According to CNBC’s analysis and LSEG’s estimates, based on its full-year outlook and actual figures for the first three quarters, the Elf can see earnings per share between 66 cents and 71 cents, well below the 97 cents expectations. .
In an interview with CNBC, CEO Tarang Amin shrugged, fearing that the company had bigger problems, instead pointing to the overall slowdown in the beauty category, a difficult previous year comparison and recent The product was launched and its performance was not as good as that of previous new product projects.
When it comes to the overall category, Amin said Mass Cosmetics fell 5% in January, and the company suspected it was driven by two factors: a hangover for holiday discounts and a slowdown in “social comments” or fewer people talk online Beauty can promote cosmetics sales.
“One, along with the LA wildfire, I don’t think people want to post a lot of things when disasters happen. Uncertainty around Tiktok. I think the only thing people post on tiktok is to stay open or close. ”
Amin also weighs New tariffs on China And how the company prepares. About 80% of its supply chain is in the region.
It is too early to say whether the elves will raise prices to offset profits, but the new 10% responsibility is better than the company does, Amin said.
Elf has been one of the fastest growing brands in beauty over the past few years, winning shoppers and seniors for its viral marketing, low prices and the Prestige Products that deliver high-quality, more deserving “dupes” Human victory.
While the brand is still growing and says it is still surpassing the entire category, growth has begun to slow down and recent product launches have not boosted sales as they did in the past.
Amin said the company prefers to adopt a “cautious” approach to guidance and still believes that Elf outperforms the overall category win.
He said the company is using the profits it creates to invest in improvements in inventory management programs, infrastructure and international expansion.
