ELF Beauty stock regains shine after guidance wiped out strong gains Investor’s Business Daily

The beauty of ELF (ELF) late Wednesday had a weaker-than-expected outlook after reporting a surprise increase in fiscal fourth-quarter earnings. ELF Beauty shares rose above a key level on Thursday.

Analysts at William Blair and Bank of America highlighted “significant” sales growth in the fourth quarter, with both companies viewing fiscal 2025 guidance as likely conservative given disciplined management and strong sales so far in the quarter.

“Overall sales growth (up 71%) was driven by volume (up 50%) and price/assortment (up 21%) and spanned categories (cosmetics, skincare) and channels (national and digital retailers).” William Blair analyst Jon Andersen wrote in a note Thursday.

ELF cosmetic products

Estimates: Analysts expected ELF Beauty to report a 21% decline in earnings to 33 cents per share, according to FactSet. Revenue increased 56% year-over-year to $292.6 million.

Results: ELF Beauty earnings rose 26% to 53 cents per share, compared with expectations for a 21% decline. Sales rose 71% to $321.1 million, driven by strength in retail and e-commerce channels, the company said in its earnings release.

Perspectives: The company forecasts EPS of $3.20 to $3.25 in fiscal 2025. Analysts expected $3.56 and now expect $3.41, according to FactSet. Revenue forecasts of $1.23-1.25 billion for the fiscal year were also below forecasts of $1.268 billion. ELF Beauty’s financial year ends in March.

ELF cosmetics warehouse

Shares of the cosmetics company rose 16% today, close to 180, on heavy volume on the stock exchange. ELF Beauty stock broke its 50-day moving average for the first time since April.

Cosmetics stocks, which particularly appeal to millennial and Gen Z consumers, lost 2.1% to 155.65 on Wednesday. It has been declining since March.

The relative strength line also rose after delays since March. The RS line, the blue line on the chart, shows the performance of ELF stock compared to the S&P 500 Index.

On Monday, Stifel analysts noted ELF Beauty’s declining U.S. market share, offsetting their expectations for strong sales growth in 2025. ELF stock initially undercut its 50-day line on April 3 amid a broad sell-off in beauty stocks as Ultra beauty (ULTA) confirmed slower growth this year.

But on Wednesday morning Objective (TGT) issued a reassuring note on beauty sales with a dismal earnings report.

The big-box retailer said shoppers were buying cosmetics but fewer other discretionary items such as clothing and household products. Target and Ulta Beauty stores carry ELF Beauty products.

Ulta Beauty will report earnings on May 30 after the market closes.

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