Labaton Keller Sucharow LLP serves as lead counsel in a securities class action against e.l.f. Beauty, Inc. (ELF or the Company), a California-based beauty company that offers low-cost cosmetics and skincare products, and ELF’s current Chief Executive Officer Tarang P. Amin and current Chief Financial Officer Mandy Fields (collectively, Defendants). The case alleges that Defendants falsely told investors that demand was strong and would lead to continued sales growth despite knowing that demand and sales growth had slowed.
On April 8, 2025, the Firm filed a lawsuit on behalf of its client Boston Retirement System (Boston) asserting claims under Sections 10(b) and 20(a) of the Securities Exchange Act of 1934, and U.S. Securities and Exchange Commission Rule 10b-5 promulgated thereunder.
On May 28, 2025, Judge Eumi K. Lee of the U.S. District Court for the Northern District of California issued an order consolidating two related cases and appointing Boston and Metropolitan Employee Benefit System (Nashville) as Lead Plaintiffs and Labaton Keller Sucharow as Lead Counsel.
On July 23, 2025, Lead Plaintiffs filed an Amended Class Action Complaint (Amended Complaint) on behalf of all persons and entities who or which, during the period from February 7, 2024, to February 6, 2025, inclusive (the Class Period), purchased the publicly traded common stock of ELF and were damaged thereby (the Class). The Amended Complaint alleges that, throughout the Class Period, Defendants misled investors with false assurances that the sales growth ELF experienced before the Class Period would continue because of strong demand in all the Company’s channels. In reality, however, Defendants knew that ELF’s sales growth would not continue, as they had observed plummeting demand trends, including (i) rising inventory levels (which they knew were caused by lower sales, not rising demand), (ii) declining sales from large, important retailers, and (iii) the repeated failures of the Company’s key “innovation” products that had been critical to ELF’s success up to that point.
The Amended Complaint alleges that the truth was partially revealed on August 8, 2024, when the Company disclosed weaker-than-expected guidance. In response, ELF’s stock price declined by more than 14% in a single day, as investors began to be concerned about ELF’s sales growth. However, Defendants continued to mislead investors throughout the rest of the calendar year 2024, reassuring the market that ELF had continued to see strong demand and that the Company’s higher inventory was caused by strong demand that Defendants had observed. The Amended Complaint alleges that the full truth was revealed on February 6, 2025, when after more than 17 quarters of double-digit year-over-year sales growth, Defendants were forced to reveal that ELF was not growing like they had falsely told investors and lowered net sales growth guidance in their upcoming Q4 FY 2025 to between -1% and 2%, the worst sales growth quarter in six years. Investors were shocked by this news, causing ELF’s stock to tumble nearly 20% in a single day.
The consolidated case is In re e.l.f. Beauty, Inc. Securities Litigation, No. 25-cv-02316-EKL (N.D. Cal.). Labaton Keller Sucharow represents its clients Boston and Nashville.
