ELF Beauty's Stock Takes a Hit Despite Rhode's Promising Start
ELF Beauty's stock dropped 29% recently, even though it has a new product line called Rhode. This line is expected to bring in an extra $200 million this year. However, the company's overall sales predictions for the year are lower than what experts thought they would be.
Sales Predictions and Analyst Expectations
- Expected Sales: Between $1.55 billion and $1.57 billion
- Analyst Predictions: $1.65 billion
Leadership Insights
The company's leader, Tarang Amin, said that Rhode, which they bought earlier this year for $1 billion, is a big part of their future growth. Rhode is expected to add $200 million to their sales this year and even more in the future. This shows how important Rhode is for ELF Beauty's growth, especially since their own growth has been slowing down.
Profit Expectations
- Expected Profits: Between $2.80 and $2.85 per share
- Analyst Predictions: $3.58 per share
Recent Performance
- Sales: $344 million, up 14% from last year but still less than the $366 million that analysts predicted.
- Profits: Dropped by 84% compared to last year.
Reasons for Lower Sales and Predictions
The company blamed the lower sales and predictions on:
- Not releasing guidance last quarter, which affected the estimates.
- New tariffs on products from China have hurt their profits.
The leader said that the second quarter was the worst for tariffs and that things should get better in the future.
Growth Driver
Right now, Rhode is ELF Beauty's main driver for growth. The product line is growing by about 40% each year and recently launched in Sephora stores across the country. The leader said that Rhode has performed extremely well and has a lot of potential for growth, not just in North America but also internationally.
