Elf Beauty forecast annual sales and profit below Wall Street estimates on Wednesday, as the cosmetics-maker grapples with higher tariff costs and cautious consumer spending, sending its shares tumbling 26% in extended trading.

The company, which provided its fiscal 2026 forecast after pulling it in May, also missed expectations for second quarter sales.

Elf Beauty expects more than $50 million in annual costs from higher U.S. tariffs on imports in fiscal 2026. China accounts for about 75% of the cosmetics-maker's global production.

Gross margin fell about 165 basis points to 69% in the quarter ended September 30.

Tariffs have sharply reduced Elf's margins, eMarketer analyst Rachel Wolff said, adding that the company is relying heavily on Rhode as sales for its namesake brand begin to

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