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ELF Warns of ‘Softer-Than-Expected’ Trends

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By: TOM BRANNA

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ELF Beauty Inc. trimmed its full-year outlook citing “softer-than-expected trends in January.” The move sent the company’s shares down in Thursday’s trading. ELF said it expects sales to be between $1.30 to $1.31 billion. That’s down from its prior forecast of $1.315 to $1.335 billion.

The Oakland-based company posted revenue of $355.3 million, beating the analyst consensus of $329.03 million and marking a 31% increase YoY. However, adjusted earnings per share came in at $0.74, falling short of the $0.77 estimate.

ELF Beauty’s Chairman and CEO Tarang Amin stated, “I’m proud of the ELF Beauty team for delivering another quarter of consistent, category-leading growth. In Q3, we grew net sales 31% and gained 220 basis points of market share in the US.”

The company’s gross margin improved by 40 basis points to 71% in the third quarter, driven by favorable foreign exchange impacts and cost savings. Still, company brass remains prudent.

“Given softer-than-expected trends in January, we are taking a prudent approach and lowering our outlook for the final quarter of our fiscal year,” Chief Financial Officer Mandy Fields said in a statement.

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