e.l.f. Beauty denies allegations from Muddy Waters that it inflated revenue, asserting the claims are unfounded and based on incomplete data and speculation.
The company states it has rigorous controls around revenue recognition, expressing full confidence in its financial statements despite claims of $135 million to $190 million overstatement.
Following a report from Muddy Waters alleging material revenue overstatement, e.l.f. Beauty’s stock initially dropped nearly 20% before recovering to around $126.
Muddy Waters claims e.l.f. reported inventory growth linked to sourcing changes, while e.l.f. argues this is part of legitimate inventory management changes.
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