Investors who lost money with shares of e.l.f. Beauty, Inc. (NYSE: ELF) should contact the Shareholders Foundation

An investor, who purchased shares of e.l.f. Beauty, Inc. (NYSE: ELF), filed a lawsuit in the U.S. District Court for the Northern District of California over alleged violations of Federal Securities Laws by e.l.f. Beauty, Inc..

Investors who purchased shares of e.l.f. Beauty, Inc. (NYSE: ELF) have certain options and for certain investors are short and strict deadlines running. Deadline: May 5, 2025. NYSE: ELF investors should contact the Shareholders Foundation at mail@shareholdersfoundation.com or call +1(858) 779 - 1554.

Oakland, CA based e.l.f. Beauty, Inc., together with its subsidiaries, provides cosmetic and skin care products under the e.l.f. Cosmetics, e.l.f. Skin, Well People, Naturium, and Keys Soulcare brand names worldwide.

e.l.f. Beauty, Inc. employs an "omni-channel distribution strategy" and sells its products with retailers in the United States, as well as internationally. e.l.f. Beauty, Inc. also sells its products online through its own direct e-commerce channels, as well as through other e-commerce websites. According to the Company's "value proposition," "[e]ach of [its] brands has accessible pricing relative to its competitive set and furthers [the Company's] mission of making the best of beauty accessible to every eye, lip, face and skin concern. As an example, e.l.f. Cosmetics' average product price point is approximately $6, as compared to other leading mass cosmetics brands which have average product price points over $9 and prestige cosmetics brands which have average product price points over $20, according to Nielsen."
e.l.f. Beauty, Inc. purports to have developed a "scalable, asset-light supply chain centered on the combination of speed to market, high-quality and low costs." Substantially all of the Company's products are sourced and manufactured in China through "close collaboration with a network of third-party manufacturers." Elf has also touted that it has "ample manufacturing capacity as well as redundant capabilities in the event that one or more suppliers cannot meet [its] needs" and that its "broad supply base gives [it] the ability to fulfill [its] product requirements and remain cost competitive."
As a retail company, effective inventory management is critical to e.l.f. Beauty, Inc's financial performance. Specifically, the Company derives revenue from "sales of [its] beauty products, net of provisions for sales discounts and allowances, product returns, markdowns and price adjustments." Accordingly, Elf's profitability depends, in largepart, on ensuring that it maintains a volume of inventory that will allow the Company to effectively sell its products at a level that will meet customer demand. Conversely, Elf maintaining a level of inventory that is excessive relative to customer demand will result in the Company holding products that cannot be effectively sold and must therefore be written down or sold at a loss, thereby negatively impacting its profitability.

On November 20, 2024, Muddy Waters Research ("Muddy Waters") published a report entitled "e.l.f. Beauty, Inc. A Revenue and Inventory Mystery", alleging that Elf had "materially overstated revenue over the past three quarters," and that in "Q2 FY24, ELF management realized its growth narrative was in trouble as its inventory built. It appears that ELF then began reporting inflated revenue and profits. Its reported inventory also appears materially inflated as a result - i.e., to account for cash that has not really come in." Further, Muddy Waters accused the Company of concealing its inventory challenges from investors by falsely attributing its rising inventory levels to supposed changes in its sourcing practices rather than the true cause-insufficient sales.

On February 6, 2025, e.l.f. Beauty, Inc. released its fiscal Q3 2024 results and provided its fiscal 2025 outlook. Specifically, Elf revealed that it expected full-year fiscal 2025 net sales growth to be 27%-28%, down from the previous guidance of 28-30%, and also revised its adjusted EBITDA guidance to $289-293 million, down from $304-308 million, resulting in part from the updated sales outlook and a $7 million foreign currency loss. Further, the Company stated that it anticipated net sales growth was lowered to -1% to +2%, with management explaining that this reflected prudence amid softer consumption trends, challenging category conditions, and slower-than-expected new product performance.

Shares of e.l.f. Beauty, Inc. (NYSE: ELF) declined from $219.77 per share on July 12, 2024, to as low as $63.50 per share on February 07, 2025.

The plaintiff claims that between November 1, 2023 and November 19, 2024, the Defendants made false and/or misleading statements and/or failed to disclose that contrary to its representations to investors, the Company was experiencing rising inventory levels as a consequence of flagging sales, that Elf falsely attributed the rising inventory levels to, among other things, changes in its sourcing practices, that to maintain investor confidence, Elf reported inflated revenue, profits, and inventory over several quarters, that accordingly. the Company's business and/or financial prospects were overstated, that all of the foregoing, once revealed, would likely have a material negative impact on the Company, and that as a result, the Company's public statements were materially false and misleading at all relevant times.

Those who purchased shares of e.l.f. Beauty, Inc. (NYSE: ELF) have certain options and should contact the Shareholders Foundation.

Contact:
Michael Daniels
Shareholders Foundation, Inc.
3111 Camino Del Rio North
Suite 423
San Diego, CA 92108
Tel: +1-(858)-779-1554
E-Mail: mail@shareholdersfoundation.com

About Shareholders Foundation, Inc.
The Shareholders Foundation, Inc. is a professional portfolio monitoring and settlement claim filing service, and an investor advocacy group, which does research related to shareholder issues and informs investors of securities lawsuits, settlements, judgments, and other legal related news to the stock/financial market. Shareholders Foundation, Inc. is in contact with a large number of shareholders and offers help, support, and assistance for every shareholder. The Shareholders Foundation, Inc. is not a law firm. Referenced cases, investigations, and/or settlements are not filed/initiated/reached and/or are not related to Shareholders Foundation. The information is provided as a public service. It is not intended as legal advice and should not be relied upon.

This release was published on openPR.