ELF Beauty Stock Plunges 28% on Mixed Earnings and Social Media Slump
ELF Beauty's stock plummeted up to 28.2% on Friday, extending its decline to 71% from record highs. The sell-off followed mixed earnings results for the fiscal third quarter.
Financial Performance:
The cosmetics brand reported revenue between $1.30 billion and $1.31 billion, below analyst estimates of $1.34 billion. Earnings per share are expected to range from $3.27 to $3.32, against analyst estimates of $3.54.
Reasons for Weaker Outlook:
CEO Tarang Amin attributed the lower guidance to a "weak month" in January due to decreased social media chatter about beauty. The LA wildfires and the brief TikTok ban contributed to the decline in online engagement.
Analyst Commentary:
Analysts at Goldman Sachs maintained their "Buy" rating on the stock but lowered their price target from $165 to $142. They believe that long-term trends remain positive, citing ELF Beauty's share gains and growth momentum amidst declining beauty category trends.
Key Takeaways:
* ELF Beauty's stock has experienced a significant decline due to lower-than-expected earnings and a slump in social media engagement.
* The company attributed the weaker outlook to the impact of natural disasters and social media uncertainties.
* Analysts remain optimistic about the company's long-term prospects despite the short-term challenges.