e.l.f. Beauty plunges 10.53% on six-day slide driven by tariff costs, weak guidance

The share price fell to its lowest level since August 2025 today, with an intraday decline of 2.35%. The stock has now declined for six consecutive trading sessions, marking a cumulative drop of 10.53% over the period. The weakness reflects investor concerns over the company’s ability to navigate rising tariffs and shifting market dynamics.

e.l.f. Beauty’s recent performance has been weighed down by a combination of margin pressures and revised financial expectations. The company disclosed annual tariff costs exceeding $50 million for fiscal 2026, driven by its reliance on Chinese manufacturing, which accounts for 75% of production. Gross margins fell 165 basis points to 69% in the second quarter, contributing to an 84% year-over-year decline in net income. While management cited pricing adjustments implemented in August to offset costs, the benefits are expected to materialize later in the year. Additionally, the company’s fiscal 2026 revenue guidance of $1.55–$1.57 billion fell below Wall Street’s $1.65 billion estimate, signaling weaker demand and compounding investor skepticism.

Strategic reliance on the Rhode acquisition, which contributed $52 million in Q2 net sales, has further highlighted vulnerabilities. While Rhode’s growth remains robust at 40% year-over-year, the namesake brand faces slowing momentum amid tough comparisons to prior viral product launches. Broader market trends, including frugal consumer spending and competitive pressures, have also dampened sentiment. Analysts note that e.l.f. Beauty’s premium valuation metrics—such as a P/E ratio of 69.31 and P/S ratio of 5.12—now face scrutiny as profitability risks materialize. The company’s focus on supply chain diversification and international expansion will be critical to restoring confidence, but near-term execution challenges persist.