Yesterday, E.l.f. Beauty (NYSE: ELF) posted robust financial results for the third quarter ended December 31, 2024, with net sales surging 31% to $355.3 million. For the first nine months of the fiscal year, e.l.f.’s net sales climbed 40% to $980.9 million.
This growth was fueled by strong performance across both retailer and e-commerce channels, both domestically and internationally. The company also expanded its U.S. market share by 220 basis points, underscoring its continued dominance in the beauty sector.
Gross margin improved by 40 basis points to 71%, aided by favorable foreign exchange impacts, cost savings, and inventory adjustments. Net income stood at $17.3 million on a GAAP basis, while adjusted net income reached $43.0 million.
Despite these strong results, the company cut its full-year sales and profit forecasts, citing weaker demand in the mass beauty category at the start of 2025. Shares tumbled over 20% in extended trading as concerns grew over slowing momentum. CEO Tarang Amin acknowledged that some newer product launches had a slower-than-expected start, and the brand’s core Gen Z audience has been distracted by broader economic and political uncertainties, including the potential impact of TikTok’s fate.
The company now projects annual net sales between $1.30 billion and $1.31 billion, down from its previous range of $1.315 billion to $1.335 billion. Adjusted profit per share is also revised downward to $3.27–$3.32 from an earlier estimate of $3.47–$3.53.
Broader industry challenges, including inflation and shifting consumer spending, have also affected other beauty companies. Potential new tariffs on Chinese imports could impact e.l.f. Beauty’s cost structure, as about 80% of its products are manufactured in China.
