Shares of e.l.f. Beauty Inc. (ELF) tumbled 6.8% in after-hours trading on Wednesday, reversing earlier gains even after the cosmetics company reported fiscal first-quarter results that handily beat analyst expectations and raised its full-year outlook.

The sell-off came despite a strong earnings report. For the quarter ended June 30, e.l.f. Beauty posted adjusted earnings of $1.75 per share, more than doubling the consensus estimate of $0.71 per share. Net sales surged 35.5% year-over-year to $479.37 million, also surpassing Wall Street's forecast of $429.5 million. The company also issued an optimistic forecast for fiscal 2027, guiding for adjusted earnings per share between $3.50 and $3.55 on net sales of $1.94 billion to $1.97 billion, both well above analyst projections.

The decline in the stock during after-hours trading suggests that the robust results and outlook may have already been priced in following a strong quarterly performance and a positive pre-market analyst upgrade. Earlier in the day, Bernstein raised its rating on e.l.f. Beauty to "Outperform" from "Market-Perform" and boosted its price target to $113 from $60, sending shares up 2.5% in pre-market action. The sharp post-market reversal indicates a potential "sell the news" reaction by investors.