E.l.f. Beauty Inc. reported a 31% increase in net sales to $355.3 million for its fiscal third quarter, surpassing Wall Street estimates of $329.67 million. However, the company's adjusted earnings per share of $0.74 met expectations, and its GAAP earnings per share were $0.30. Despite the sales beat, E.l.f. experienced a 36% drop in profits and lowered its full-year guidance, now expecting sales between $1.3 billion and $1.31 billion, down from a previous range of $1.32 billion to $1.34 billion, and adjusted earnings per share between $3.27 and $3.32, below the prior forecast of $3.47 to $3.53. The company attributed the guidance cut to softer-than-expected sales trends in January, influenced by factors such as the LA wildfires, uncertainty around TikTok, and a 5% decline in mass cosmetics. E.l.f. also noted that recent product launches underperformed and social commentary on beauty products was down. Despite these challenges, the company reported higher-than-expected holiday sales but does not plan to raise prices to offset the new 10% tariff on Chinese goods, which will not impact the company's fiscal year 2025 results as 80% of its production comes from China. Following the earnings report, E.l.f.'s stock experienced significant declines, dropping over 20% in after-hours trading.