Beauty may be skin deep but e.l.f. Beauty’sELF

success goes all the way to the core. Over the past five years, the cosmetics name has surged over 800%, outperforming every other publicly traded beauty brand. Its generational returns even helped it graduate from the growth-flavored Russell 2000 to the Russell 1000. But despite boasting best-selling products, the brand is striking a cautious tone after a successful quarterly report.

• E.l.f.’s first-quarter sales soared to $324.5M, up 50% from the previous year — powered by solid performances in color cosmetics and skincare, including the launch of the Bronzing Drops serum.
• However, the company anticipates lower profit margins for the second quarter due to higher marketing expenditures, leading to a nearly 15% drop in its stock on Friday, the steepest decline since Mar. 2020.

Tariff struggles: With nearly 80% of its products made in China, e.l.f. could face a 60% tariff by 2026 if Donald Trump returns to office and raises tariffs on Chinese imports. The beauty powerhouse plans to counter this challenge with a diversified supply chain and price hikes. Despite their timid outlook, e.l.f. Beauty remains one of the best-positioned cosmetic brands among Gen Z, thanks in part to TikTok and YouTube influencers that showcase and help market its affordable products.