e.l.f. Beauty Inc (NYSE:ELF) shares plunged after the cosmetics company slashed its full-year revenue guidance following weaker-than-expected sales in January.
The company now expects net sales in the range of $1.3 billion to $1.31 billion, compared to earlier estimates of $1.315 billion to $1.335 billion.
Adjusted EBITDA is expected to be in the range of $289 million to $293 million, down from $304 million to $308 million.
The company expects earnings per share of $3.27 to $3.32, down from its prior guidance of $3.47 to $3.53.
“Our updated outlook for fiscal 2025 reflects an expected 27-28% year-over-year increase in net sales, as compared to an expected 28-30% increase previously,” e.l.f. Beauty CFO Mandy Fields said in a statement.
An earnings miss for the fiscal third quarter also weighed on e.l.f. Beauty’s shares on Friday.
For the holiday quarter, it posted earnings per share of $0.74, below estimates of $0.76.
Sales grew 31% year-over-year to $355.3 million, ahead of estimates of $330.4 million.
Analysts at Jefferies lowered their price target on e.l.f. Beauty to $110 from $175 following the release of its quarterly report.
Shares of e.l.f. Beauty had tumbled 21% to $70 in early trade.
“We believe management to be strong operators capable of growing a multi-brand business, but it's increasingly difficult to see double-digit topline growth due to the slowdown in food, drug, and mass,” they wrote.
Jefferies highlighted the slowdown to 2% growth in January, down from 16% in December. Management attributed this to a consumer stock-up effect amid a promotional January, lapping lip oil launches, and social dialogue shifting away from beauty as consumers were more focused on the California wildfires and possible TikTok ban.
“While the company believes most of the reason for softness is temporary, they did note a slowdown in the overall category, and are baking that as well as macro-related conservatism into their full-year guide,” analysts wrote.