Beauty stocks have taken a hit this week, with companies like E.l.f. Beauty and Estee Lauder issuing disappointing guidance and cutting jobs.
Estee Lauder announced plans to cut up to 7,000 jobs by fiscal 2026, while shares fell 22% on the week. The company beat revenue expectations but missed on adjusted earnings per share, citing a decline in online attention to beauty products and softening travel retail demand in Asia.
E.l.f. Beauty’s shares cratered nearly 29% over five days after posting disappointing guidance for its full-year sales. CEO Tarang Amin attributed the decline to holiday discounting and decreased online attention.
Analysts from major firms Morgan Stanley, D.A. Davidson, and UBS downgraded E.l.f.’s stock to neutral or equal weight, citing the cut guidance. Ulta Beauty and Coty also faced pressure, with their shares trimming 9% and nearly 8%, respectively.
The beauty sector is under threat from tariffs, which could eat into profits. China’s announcement of new tariffs on select U.S. imports follows President Trump’s additional 10% tariffs on Chinese goods. E.l.f.’s CEO expressed relief at the lower tariff rate compared to previously floated levies as high as 60%.
As the sector grapples with these challenges, beauty stocks face an uncertain future, with disappointing earnings and job cuts casting a gloomy outlook.
Source: https://www.cnbc.com/2025/02/07/beauty-stocks-post-major-losses.html