- E.l.f. Beauty CEO Tarang Amin said the LA wildfires and looming TikTok ban lowered social media conversions for sales, which the company says is a key reason for why the company is lowering its fiscal outlook for the rest of the year. This was a blow to e.l.f. Beauty, which relies on social media advertising and user-generated content for sales.
Although e.l.f. Beauty posted strong third-quarter fiscal 2025 results on Thursday, the budget-friendly makeup company revised its outlook for the rest of the year based on a softer-than-expected January.
Tarang Amin, CEO of e.l.f. Beauty, blames January’s slowdown on a “hangover” from December promotions and consumers being distracted by the wildfires in Los Angeles and the looming TikTok ban (which never fully happened).
“Consumer mindshare was focused elsewhere,” Amin said on the earnings call Thursday.
That led social conversion to be “way down” at more than 20%, according to Amin.
“We attribute [it] to two things; one, the wildfires in LA. I don't think brands wanted to be tone deaf during that devastation and then the uncertainty around TikTok,” Amin said. “It seems for a while the only thing people were posting on TikTok was whether it was going to stay open or shut down.”
E.l.f. Beauty didn’t respond to Fortune’s request for further comment.
The “softer-than-expected trends in January” led e.l.f. to lower its outlook for the final quarter of the fiscal year, which reflects an expected 27%-to-28% year-over-year increase in net sales, Mandy Fields, e.l.f. Beauty’s chief financial officer, said in a statement. The previous outlook was an expected 28%-to-30% increase.
Many beauty companies rely on user-generated content (UGC) and other social media marketing to boost sales. UGC can increase conversions by as much as 70%, according to tech platform Skeeper’s 2024 impact report. e.l.f Beauty has consistently been a brand recognized for its UGC and social media marketing strategies.
e.l.f. Beauty has been recognized multiple times and earned Shorty Awards for innovation on TikTok; the Shorty Awards recognize brands’ accomplishments for social media marketing innovation and engagement. At the time, e.l.f.’s TikTok campaign, #EyesLipsFace, became the most viral campaign in TikTok U.S. history, attracting 5 million user-generated videos totaling a whopping 7 billion views.
But with the question of TikTok’s future in the balance, not as many users were posting about their favorite brands. Instead, many confessed to lies they’ve been telling their followers to gain more popularity on the app. After TikTok’s brief blackout period in January, some of these influencers tried to backtrack on the hail-Mary confessions they’d made when they thought the app would cease to exist.
Also in January, social media users were captivated and haunted by the stories and imagery from the devastating wildfires in L.A. that killed 29 people and destroyed 17,000 structures. Like Amin said, it would’ve seemed “tone deaf” to post about makeup amid the wildfire tragedy.
But Amin said the company anticipates social media conversation will “normalize” moving into the next quarter.
“Now that the wildfire is over, [and] some of the TikTok uncertainty has gone back and forth, so we definitely are starting to see a little bit of a pickup in the social conversations,” Amin said during the call.
Still, e.l.f. Beauty posted a healthy quarter, growing net sales by 31% to $355.3 million. E.l.f. Beauty also recently told Fortune’s Diane Brady the company is well-prepared to weather tariffs since the company has been subject to 25% tariffs since 2019.
“We used a balanced playbook,” Amin told Fortune. “We did some selective price increases. We had cost savings. We had supplier concessions. FX moved in our favor. And we were able to overcome those tariffs. If I look at an incremental tariff now, we’d use a similar playbook.”
