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ELF Beauty (ELF) hiked earnings outlook above consensus late Wednesday after crushing lofty estimates for its fiscal second quarter. ELF Beauty stock surged in extended trading.
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Shares in the fast-growing cosmetics company, a favorite among millennials and Gen Zers, plunged Tuesday as one analyst suggested a slowdown ahead. Another analyst signaled a beat-and-raise report.
ELF Beauty Earnings
Estimates: Analysts expected ELF Beauty earnings to jump 46% to 53 cents per share, according to FactSet. Revenue is seen growing 61%, year over year, to $197.1 million.
Results: ELF Beauty earnings more than doubled to 82 cents per share. Revenue soared 76% to $215.5 million, driven by strong retail and e-commerce sales, the company said.
Outlook: The company guided 55%-57% year-over-year increase in net sales vs. its expectations for 37-39% growth previously. It now expects EPS of $2.47-2.50, up from $2.19-2.22 prior.
Ahead of Wednesday’s results, analysts were expecting full-year EPS of $2.46, a 48% increase from fiscal 2023. The fiscal year ends in March.
It’s the latest in a series of big beat-and-raise reports for E
ELF Beauty Stock
ELF stock jumped 6% in late trade. Shares reversed higher to close up 2.1% to 94.54 on the stock market today. ELF Beauty stock sank 10.2% Tuesday, undercutting the 200-day moving average.
The consumer discretionary stock has wilted amid a broad market decline since September. But ELF Beauty stock still holds a 62% gain from its breakout in January past a 56.92 flat-base buy point, the MarketSmith chart shows.
ELF Stock Ready For A Recession?
Despite a high bar for ELF Beauty earnings, analysts at UBS said Tuesday they expected a “strong” beat-and-raise report after the market closes, the Fly reported.
But Jefferies analyst Ashley Helgans wrote Tuesday that ELF has had some sales deceleration, citing research firm Nielsen.
The trailing four-week sales for ELF Beauty were up 45% from the prior year in the week of Oct. 21, the data showed. That compared with previous trailing four-week sales that were up 49%.
But Helgans told Barron’s ELF stock remains a top pick because “they’re the best beauty company positioned for any kind of trade down or any kind of recession.”
“Trade down” refers to consumers seeking less expensive products when an economy turns difficult.
ELF Beauty makes and markets a variety of cruelty-free cosmetics at an affordable cost. The company sells both online and through stores such as Target (TGT) and Walmart (WMT).
Amid its recent pullback, ELF Beauty stock shows rising mutual fund ownership.
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