E.l.f. Beauty Denies Muddy Waters’ Revenue Inflation Allegations

The cosmetics company refutes claims of overstated revenue and inventory, calling the short-seller's report inaccurate and misleading.

Hedge fund Muddy Waters alleges E.l.f. Beauty overstated revenue by $135 million to $190 million over the past three quarters and inflated inventory figures.
E.l.f. Beauty strongly denies the accusations, citing 23 consecutive quarters of net sales and market share growth, as well as rigorous financial controls.
The company argues that Muddy Waters relied on incomplete import data, which does not reflect the majority of E.l.f.'s U.S. imports due to a confidentiality request filed earlier this year.
E.l.f. highlights strong demand for its products, including a 91% increase in international sales last quarter, as evidence of its financial health and growth.
Following the allegations, E.l.f.'s stock initially dropped but has since recovered, with the company maintaining confidence in its business model and financial statements.