What Does the Recent Volumetric Slowdown Mean for Elf Beauty (ELF)

e.l.f. Beauty Inc. (NYSE:ELF) is one of the 7 best mid-cap consumer defensive stocks to buy.

On March 9, Piper Sandler highlighted that the February consumption data for e.l.f. Beauty Inc. (NYSE:ELF) declined to a flat level, a 5-point deceleration from January. In contrast to high single-digit in the U.S. during the third quarter, Q4-to-date consumption data is running at low single digits, and comparable trends were observed mid-month at a rival conference. Because spring innovation is being set at partners, the firm thinks this might be tied to the weather.

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The slowdown was caused by volume, which had been in the negative mid-single digit range since higher pricing was implemented, falling to minus 10% in February. Concurrently, in the United States, the mass cosmetics market grew by 2% between January and February. The firm continues to assess Elf as Neutral because of its ability to develop its main business from low single digits.

Back on February 9, Oliver Chen from TD Cowen maintained a Buy rating on e.l.f. Beauty Inc. (NYSE:ELF). The analyst reduced his target price on the stock from $110 to $100. The move follows updated estimates after the third quarter results, with the expectations of core growth to normalize to low single digits in the second half. Chen added that this reset could keep the shares range-bound in the near term.

e.l.f. Beauty Inc. (NYSE:ELF) is a provider of beauty and skin care products that sells in and outside the United States through retail and e-commerce channels. They operate under various brand names such as e.l.f. Cosmetics, e.l.f. Skin, Well People, Naturium, and Keys Soulcare. Some of their offerings include skin-care products, lipsticks, blushes, bronzers, mineral-based makeup, eyeliners, brushes, and mascara.

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