E.l.f. Beauty's stock plummeted over 25% after downgrading its full-year guidance despite achieving strong Q3 revenue of $355.3 million, a 31.1% increase. Adjusted revenue forecasts were lowered to between $1.3 billion to $1.31 billion, underperforming expectations. Factors affecting the outlook include January's category decline, driven by consumer behavior and external events like the L.A. wildfires and TikTok uncertainties. Meanwhile, net income also decreased from $26.9 million a year prior to $17.3 million, indicating broader economic and social influences on consumer spending.
First, the category continued to decline in January. We believe this decline is reflective of consumers stocking up in a highly promotional December, and lower social conversation around beauty.
Consumer mindshare is focused elsewhere, including wildfires in L.A. and uncertainty around the TikTok platform.
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