e.l.f. Beauty, Inc.

Faruqi & Faruqi, LLP Securities Litigation Partner James (Josh) Wilson Encourages Investors Who Suffered Losses Exceeding $50,000 In e.l.f. Beauty To Contact Him Directly To Discuss Their Options

If you suffered losses exceeding $50,000 in e.l.f. Beauty between May 25, 2023 and February 6, 2025 and would like to discuss your legal rights, call Faruqi & Faruqi partner Josh Wilson directly at 877-247-4292 or 212-983-9330 (Ext. 1310).

Faruqi & Faruqi, LLP, a leading national securities law firm, is investigating potential claims against e.l.f. Beauty, Inc. (“e.l.f. Beauty” or the “Company”) (NYSE: ELF) and reminds investors of the May 5, 2025 deadline to seek the role of lead plaintiff in a federal securities class action that has been filed against the Company.

Faruqi & Faruqi is a leading national securities law firm with offices in New York, Pennsylvania, California and Georgia. The firm has recovered hundreds of millions of dollars for investors since its founding in 1995. See www.faruqilaw.com.

As detailed below, the complaint alleges that the Company and its executives violated federal securities laws by making false and/or misleading statements and/or failing to disclose that: (1) failing to disclose that declining consumer demand trends were negatively impacting the Company’s business; (2) falsely attributing the increase in ELF’s inventory value to accounting adjustments arising from changes in shipping logistics and planned efforts to support “strong consumer demand”; (3) reporting inflated ELF’s revenues and profits; (4) providing false assurances about the adequacy of ELF’s inventory controls; and (5) as a result of the foregoing, making public statements about the Company’s business, operations, and prospects that were materially false and misleading.

On August 9, 2024, investors began to learn the truth about the slowing consumer demand for ELF products when the Company released its fiscal Q1 20241 results and provided its outlook for fiscal Q2 2024.  Specifically, ELF issued meaningfully weaker-than-anticipated guidance for fiscal Q2 2024 and acknowledged downward pressure on its adjusted EBITDA guidance, approximately $30 million lower than expected by analysts, signaling a sequential slowdown in growth.  

On this news, ELF’s stock price fell $27.12 per share, or 14.4 percent, to close at $160.83 per share on August 9, 2024. 

Then, on November 20, 2024, Muddy Waters Research published a report accusing ELF of revenue fraud and raising concerns about the Company’s inventory management practices (the “Muddy Waters Report”).  Specifically, the Muddy Waters Report alleged that ELF overstated its revenue by $135 million to $190 million during the Class Period.  The Muddy Waters Report further accused ELF of concealing declining customer demand from investors by falsely attributing the rising value of its inventory to a supposed change in its practice of taking ownership of inventory upon arrival at distribution centers in the United States instead of in China when the products ship.  

Following publication of the Muddy Waters Report, ELF’s stock price fell $2.71 per share, or 2.2 percent, to close at $119.00 per share on November 20, 2024     

Finally, on February 6, 2025, ELF released its fiscal Q3 2024 results and reduced its financial outlook for the first time since the onset of the COVID-19 pandemic.  Specifically, ELF lowered its revenue and adjusted EBITDA guidance for fiscal 2025.  Management explained that these downward revisions reflected lower demand trends, challenging category conditions, and slower-than-expected new product performance.  

On this news, ELF’s stock price fell $17.36 per share, or 19.6 percent, to close at $71.13 per share on February 7, 2025. 

The court-appointed lead plaintiff is the investor with the largest financial interest in the relief sought by the class who is adequate and typical of class members who directs and oversees the litigation on behalf of the putative class. Any member of the putative class may move the Court to serve as lead plaintiff through counsel of their choice, or may choose to do nothing and remain an absent class member. Your ability to share in any recovery is not affected by the decision to serve as a lead plaintiff or not. 

Faruqi & Faruqi, LLP also encourages anyone with information regarding e.l.f. Beauty’s conduct to contact the firm, including whistleblowers, former employees, shareholders and others.

To learn more about the e.l.f. Beauty class action, go to www.faruqilaw.com/ELF or call Faruqi & Faruqi partner Josh Wilson directly at 877-247-4292 or 212-983-9330 (Ext. 1310).

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