With sales of its cut-priced make-up seemingly going gangbusters investors might ponder why ELF Beauty’s (ELF:NYSE) share price performance is anything but pretty.

The Californian business posted strong third-quarter fiscal 2025 revenues on 6 February, showing 31% year-on-year growth, yet earnings were flat and marginally light of consensus, suggesting ELF Beauty is having to spend more on marketing to keep the sales machine going.

That ELF Beauty revised its outlook for the rest of the year, based on a softer-than-expected January, also weighed heavily, with CEO Tarang Amin’s claims that LA wildfires and a possible TikTok ban lowering social media sales conversions sounding a little hollow.

The stock tanked, falling 20% in response and leaving the shares at their lowest in two years.

Donald Trump’s new 10% tariffs on imports from China are on the horizon, which could force the company to raise prices, with about 80% of its products manufactured in China, down from 100% percent five years ago. That’s hardly a backcloth likely to entice cash-strapped US consumers to spend more, and with interest rates still higher, and inflation starting to emerge again, it could be a bumpy 2025 for ELF Beauty. 

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