ELF Beauty reported a 36% drop in profits for Q4, attributing weak demand in January to the impact of LA wildfires and uncertainty over TikTok's future. CEO Tarang Amin noted that social media conversations surrounding beauty diminished significantly due to these factors. Additionally, the company's outlook for 2025 was lowered, reflecting concerns that had led to a decrease in consumer engagement with beauty products. The overall sentiment around beauty shifted in January as consumers' focus was diverted.
First, the category continued to decline in January. We believe this decline is reflective of consumers stocking up in a highly promotional December and lower social conversation around beauty.
Consumer mindshare was focused elsewhere, including wildfires in LA and uncertainty around the TikTok platform.
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