E.l.f. Beauty CEO Tarang Amin told CNBC’s Jim Cramer why the company saw lighter business in January, citing declines across the industry and saying some new products have been off to a slower start.
“I remain bullish on the business,” he said. “But our approach is always, we have a high degree of transparency. If we see something, we pass it through.”
Thursday evening, E.l.f posted a slight earnings miss but beat on revenue. The budget cosmetics brand cut its full-year guidance after “softer than expected” sales trends in January – a shift in tone for the company that has otherwise escaped the business woes felt by many of its peers. The stock tanked more than 24% in extended trading.
Amin said the industry broadly can see a “consumer hangover” after a highly-promotional holiday season. He also said E.l.f.’s “social commentary” was down by almost 20% during January. He attributed some of that change to current events that might have discouraged users from posting about products, including the wildfires in Los Angeles and turmoil on TikTok due to the potential ban. He said he expects these factors to normalize over time.
In general, Amin continued, E.l.f. feels satisfied with its marketing efforts, saying they have always been able to “engage and entertain our community.” He added that the company debated spending a bit more on marketing because it’s effective, but ultimately decided to hold off for now as consumers continue to worry about inflation and the economy.
Amin also addressed President Donald Trump’s tariff hikes. So far, Trump has increased taxes on goods from China by 10%, which could lead many consumer companies that manufacture abroad to raise prices. According to Amin, E.l.f. has “an incredible price umbrella” and managed to adjusted to tariffs in the past, saying the company has paid 25% import taxes since 2019.
“This time around, it’s just an additional ten points right now,” He said. “We could use that same balanced plan, plus we have greater supplier diversification and a much bigger international business. So, I feel confident that we can maintain our extraordinary value and address the tariff issue.”
