E.l.f. Beauty Shares Plunge Amid Tariff Worries

Published 6 hours agoELF

E.l.f. Beauty Shares Plunge Amid Tariff Worries

E.l.f. Beauty's shares took a significant hit, dropping over 20% in extended trading. This decline follows the company's move to slash its annual sales and profit forecasts due to waning demand in the mass beauty market. Reuters reported that investor concerns have mounted due to the newly announced tariffs under President Donald Trump, which pose a risk to a company heavily reliant on Chinese manufacturing.

Approximately 80% of E.l.f. Beauty's products are manufactured in China, and the new 10% tariff on Chinese imports has stirred worries. However, CEO Tarang Amin expressed some relief, pointing out that fears of much higher tariffs, potentially up to 60%, have not materialized. In response to prior tariffs, the company had raised prices on a third of its products, and it is now assessing whether further price adjustments will be necessary in light of the new tariff.

E.l.f. Beauty has been actively working to reduce reliance on Chinese manufacturing, decreasing it from nearly 100% to about 80% over the past five years. While this diversification effort continues, DA Davidson acknowledged the significant impact of the tariffs on E.l.f. Beauty's stock. Meanwhile, analysis from Canaccord suggests that despite the immediate stock sell-off, this could represent a buying opportunity, given E.l.f. Beauty's history of navigating tariff impacts successfully.

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