e.l.f. Beauty Inc. (ELF) shares plummeted 5.71% during intraday trading on Thursday, reversing earlier gains following the company's quarterly earnings release.
The decline came despite e.l.f. Beauty reporting better-than-expected third-quarter financial results and raising its fiscal-year 2026 guidance above estimates. The company's adjusted earnings per share of $1.24 significantly beat consensus estimates of 72 cents, while revenue of $489.50 million also exceeded expectations.
However, investors focused on the company's gross margin, which declined to 71% due to higher tariff costs. This margin pressure, partially offset by pricing and mix benefits, appears to have triggered profit-taking and concerns about profitability, leading to the stock's reversal from earlier gains.