Step 1
Unite with Fellow Investors
Step 2
Choose the Best Attorney
Step 3
Provide Documents
Step 4
Follow Case Progress
Step 5
Get Payout
ELF.US
id: 1517
e.l.f. Beauty (ELF) Stock Inflation and Inventory Mismanagement Case
N.D. California
Court4:25-cv-02316
Case number11/01/2023
Class period Start11/19/2024
Class period End05/05/2025
Lead Plaintiff motion deadline- $ELF stockholders filed a claim against e.l.f. Beauty for inflating revenue and inventory figures while concealing sales declines.
- After the Muddy Waters report on November 20, 2024, and further financial disclosures, $ELF dropped nearly 47%.
Case Details:
Between November 1, 2023, and November 19, 2024, e.l.f. Beauty ($ELF) allegedly misled investors by making its revenue and inventory numbers look stronger than they actually were. The company wanted to keep up its image as a fast-growing beauty brand, but behind the scenes, sales were slowing.
In fiscal Q2 2024, $ELF reported a 76% jump in net sales, claiming strong demand. However, reports later revealed that the company was quietly building up excess inventory because products weren’t selling as expected. Instead of admitting the issue, $ELF told investors the inventory spike was due to changes in its supply chain, not falling sales.
On November 20, 2024, Muddy Waters Research released a report accusing $ELF of inflating revenue by $135 million to $190 million over several quarters. The report also claimed that $ELF’s inventory was much higher than expected because sales were weaker than the company let on. This revelation sent $ELF down 2.23%, closing at $119.00 per share.
Over the following months, $ELF stock kept falling. On February 6, 2025, the company lowered its revenue and earnings expectations, blaming “softer-than-expected trends” and underperforming product launches. This caused $ELF to drop another 19.62%, closing at $71.13 per share.
By March 5, 2025, $ELF had declined nearly 47%.
Based on these events, $ELF investors filed a lawsuit against e.l.f. Beauty, accusing the company of the following:
- It falsely attributed rising inventory levels to changes in sourcing practices rather than slowing sales.
- It provided misleading financial guidance while executives sold shares at inflated prices.
Considering all the representations, investors suspect $ELF misled them about its true financial performance by fabricating revenue growth and concealing declining sales trends.
Case Status
Lead Plaintiff Submission
Alleged Offence
Misleading Statements,
Financial Misrepresentation,
Failure to Disclose
Suspected Party
Directors,
Management
Security Type
Stocks
Trade Direction
Long
Shock Event Date
11/20/2024
Filing date
03/06/2025
Lead Plaintiff Deadline
05/05/2025