Shares of e.l.f. Beauty (ELF) plunged over 10% in after-hours trading yesterday, despite beating both sales and earnings estimates for the first quarter of Fiscal 2025. What’s more, the cosmetics company lifted its FY25 outlook based on the continued demand momentum. Despite the beat-and-raise results, shares fell as the company’s upgraded full-year earnings guidance missed expectations.
Investors are also concerned about the potential rise in tariffs on imports from China and higher shipping costs. The company sources a significant portion of its products from China.
Year-to-date, ELF shares have gained over 30%, backed by consecutive quarters of net sales growth and market share gains.
More on ELF’s Q1 Results
ELF’s net sales jumped nearly 50% year-over-year to $324.48 million in Q1 FY25 (ended June 30, 2024) and easily beat the consensus of $304.67 million. The solid sales growth was aided by consistent demand in both the retail and e-commerce channels.
Moreover, adjusted earnings per share (EPS) of $1.10 was flat compared to Q1 FY24, but higher than the Street’s estimates of $0.83.
ELF Lifts FY25 Outlook
For Fiscal 2025, ELF now projects net sales in the range of $1.28 to $1.30 billion, up from the previous outlook of $1.23 to $1.25 billion and reflecting a 25%-27% annual jump. Similarly, adjusted EPS is now forecasted between $3.36 and $3.41, up from the prior guidance range of $3.20 to $3.25.
For reference, analysts were expecting net sales of $1.30 billion and adjusted EPS of $3.42, which was above ELF’s revised guidance.
Hedge Funds Sell ELF Stock
TipRanks’ Hedge Funds Trading Activity tool shows that hedge funds are selling e.l.f. Beauty stock. Currently, ELF has a Very Negative Hedge Fund Confidence Signal, as hedge funds decreased their ELF holdings by 165,800 shares in the last quarter.
Is ELF a Good Stock to Invest In?
Wall Street is highly optimistic about ELF stock’s trajectory. On TipRanks, ELF commands a Strong Buy consensus rating based on 12 Buys versus two Hold ratings. The average e.l.f. Beauty price target of $228.30 implies 21.5% upside potential from current levels.
