Why elf Beauty Inc. (ELF) Crashed Last Week

We recently compiled a list of the These 10 Firms Were Last Week’s Worst Performers. In this article, we are going to take a look at where elf Beauty Inc. (NYSE:ELF) stands against the other stocks.

Volatile trading persisted on the stock market last week as investors scrambled to react to a flurry of positive and negative news that sparked both buying and selling positions.

On Friday alone, all Wall Street main indices fell into the red territory, with trading dampened mainly by tariff threats and expectations of a higher inflation rate in the US.

Ten companies under mixed sectors also mirrored the decline, with each booking double-digit slumps. This article details which 10 companies suffered the most last week and what specifically caused investor pessimism.

To come up with last week’s worst performers, we considered only the stocks with at least $2 billion in market capitalization and $5 million in daily trading volume.

A close up of the lip and eye products from the company on a model in a fashion and beauty shoot.

elf Beauty Inc. (NYSE:ELF)

Shares of elf Beauty declined by 28.9 percent last week to close at $71.13 each versus the $99.91 registered on January 31, mainly due to a lower earnings outlook for fiscal year 2025.

In its latest earnings release, ELF lowered its full-year 2025 sales outlook to between $1.3 billion and $1.31 billion from $1.31 billion to $1.33 billion previously.

“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. Our updated outlook for fiscal 2025 reflects an expected 27-28 percent year-over-year increase in net sales, as compared to an expected 28-30 percent increase previously,” said ELF Chief Finance Officer Mandy Fields.

In the third quarter of fiscal year 2025, ELF saw net income drop by 35.8 percent to $17.26 million from $26.89 million, while net income for the first nine months fell by 26 percent to $83.8 million from $113 million year-on-year.

Overall ELF ranks 3rd on our list of last week’s worst performers. While we acknowledge the potential of ELF as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and doing so within a shorter timeframe. If you are looking for an AI stock that is as promising as ELF but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.

READ NEXT: 20 Best AI Stocks To Buy Now and Complete List of 59 AI Companies Under $2 Billion in Market Cap.

Disclosure: None. This article is originally published at Insider Monkey.