ELF Beauty's Stock Takes a Hit Despite Rhode's Promising Start

ELF Beauty's stock dropped 29% recently, even though it has a new product line called Rhode. This line is expected to bring in an extra $200 million this year. But the company's overall sales predictions for the year are lower than what experts thought they would be. They expect to make between $1. 55 billion and $1. 57 billion, which is less than the $1. 65 billion that analysts predicted. The company's leader, Tarang Amin, said that Rhode, which they bought earlier this year for $1 billion, is a big part of their future growth. Rhode is expected to add $200 million to their sales this year and even more in the future. This shows how important Rhode is for ELF Beauty's growth, especially since their own growth has been slowing down. When it comes to profits, ELF Beauty expects to make between $2. 80 and $2. 85 per share, which is much lower than the $3. 58 per share that analysts expected. In the last three months, their sales were $344 million, which is up 14% from last year but still less than the $366 million that analysts predicted. Their profits also took a big hit, dropping by 84% compared to last year. The company blamed the lower sales and predictions on not releasing guidance last quarter, which they said affected the estimates. They also mentioned that new tariffs on products from China have hurt their profits. The leader said that the second quarter was the worst for tariffs and that things should get better in the future. Right now, Rhode is ELF Beauty's main driver for growth. The product line is growing by about 40% each year and recently launched in Sephora stores across the country. The leader said that Rhode has performed extremely well and has a lot of potential for growth, not just in North America but also internationally.