E.l.f. Beauty Defends Against Muddy Waters Claims

E.l.f. Beauty has vehemently denied allegations from short-seller Muddy Waters that it inflated its revenue by as much as $190 million over the past three quarters, calling the claims 'meritless.' Muddy Waters' CEO, Carson Block, asserted during a conference in London that E.l.f. reported rising revenues while importing fewer products, suggesting inflated inventory figures. Following the report, E.l.f.'s stock experienced a significant drop of up to 16% but showed signs of recovery the next day. The company emphasized that it filed for confidentiality regarding its import data, complicating Muddy Waters' analysis. Despite the controversy, E.l.f. reported strong financial results, with a 40% year-over-year sales increase in its recent quarter. Analyst sentiments remain mixed, with some questioning the validity of Muddy Waters' data and others expressing concern over E.l.f.'s inventory practices.