Elf Beauty says Iran war could cost millions, beats Q4 earnings
Investing.com -- Elf Beauty on Wednesday beat Wall Street estimates for its fourth quarter results but projected weak annual sales and profit in a sign that rising oil prices linked to the Iran war are affecting companies.
The company said that the ongoing war could result in company seeing a $15 million to $20 million impact in its fiscal 2027.
Shares of the cosmetics maker however, climbed about 6% in extended trading after the company reported fourth-quarter results that exceeded analyst estimates.
The company joins other global firms affected by the U.S.-Israeli war with Iran, though it has not incorporated the anticipated impact into its current forecast.
Chief Financial Officer Mandy Fields said the company has cost-savings programs that could help offset the impact. She added that tariff refunds might also help mitigate those costs.
Elf Beauty, which depends on China for approximately 75% of its production, has faced challenges from import tariffs introduced by U.S. President Donald Trump that were later struck down by the Supreme Court.
Fields said Elf paid about $58.5 million in tariffs and is working to collect the refunds.
The company expects full-year net sales between $1.84 billion and $1.87 billion, with the midpoint below the analyst average estimate of $1.87 billion, according to LSEG data.
Annual adjusted profit is projected at $3.27 to $3.32 per share, also below expectations of $3.61.
Elf, which offers about 75% of its products at $10 or less, has attracted demand among cost-conscious shoppers despite broader economic uncertainty.
"All five of our brands grew this year, with rhode and Naturium delivering particularly strong results and reinforcing the power of our expanding brand portfolio. The whitespace opportunity in front of us across brands, categories, and geographies gives us great confidence in the runway ahead," said Elf's CEO, Tarang Amin.
Elf, short for eyes, lips, and face, reported a 35% increase in fourth-quarter sales to $449.3 million, versus the consensus estimate of $423.23 million.
Quarterly adjusted earnings per share reached 32 cents, $0.03 better than the analyst estimate of $0.29.