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“e.l.f. Beauty Collapses 34% as Tariffs Hammer Q2 Results and Slash Full-Year Outlook“🚨🚨🚨

While tariff-sensitive stocks rallied Wednesday on optimism that the Supreme Court could strike down key portions of President Trump’s trade tariffs, e.l.f.

Beauty (ELF $79.59, -32.46%) served as a stark reminder that many U.S. companies remain deeply exposed to the shifting tides of global trade.

The cosmetics retailer’s Q2 earnings report landed with a thud after the close, revealing a double miss on both net sales and adjusted earnings per share, while the company’s full-year guidance came in well below Wall Street’s expectations. Shares plunged more than 34% in early trading — potentially marking the biggest single-day loss in company history if it doesn’t rebound.

During the company’s earnings call, Chief Financial Officer Mandy Fields gave investors a blunt look at just how painful the tariff environment has become:

“To set the foundation, about 75% of our global production today comes from China. Between April 9 and May 13, we were subject to tariffs at the 170% level. From May 14 through the end of October, product imports to the U.S. were subject to tariffs at the 55% level. As of November, we are now subject to a lower tariff at the 45% level given the recent reduction announced by the administration.”

Every 10% increase in tariffs adds roughly $17 million to e.l.f.’s annual cost of goods sold, according to the company’s investor presentation. In response, e.l.f. raised prices by $1 across its product line in an effort to offset the added costs — but it wasn’t nearly enough.

Gross margins slipped 165 basis points year-over-year, underscoring the pressure facing U.S. consumer brands that rely heavily on Chinese manufacturing.

The broader irony? While many trade-exposed stocks rallied on the hope of tariff relief, e.l.f. Beauty’s results showed what the real-time cost of those policies looks like on the ground.

If the Supreme Court ultimately sides against a chunk of the Trump-era tariffs, companies like e.l.f. could eventually breathe easier — but for now, the damage to earnings, pricing power, and investor confidence is already done.