Stock of the Day from Investor’s Business Daily triggers sell rule, causing Ulta comments to drag down beauty stocks.

Stock of the Day from Investor’s Business Daily triggers sell rule, causing Ulta comments to drag down beauty stocks.

beauty elf

beauty elf

ELF


$19.69

10.59%



239%

IBD Stock Analysis

  • A sharp break of the 10-week moving average triggers a sell signal.

Composite score

Classification of industrial groups

Emerging model

Breakdown

* No real-time data. All data shown was captured at 1:39 p.m. EDT on 04/03/2024.

ELF Beauty is the IBD Stock of the Day for Wednesday, but not because the stock is a buy. Elf stock is sending a sell signal as it breaks below a key support level.




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Ulta comments on Spark Cosmetics decline

Beauty and cosmetics stocks fell on Wednesday following cautious comments from Ulta Beauty (ULTA) executives at JPMorgan Retail Round Up annual investor conference.

Ulta CEO Dave Kimball and CFO Paula Oyibo said the company is experiencing “a little slower growth” than expected this year and expects comparable sales growth at the “low end” of its first-half forecast, The Fly reported.

“We had anticipated a moderation in total category growth to the mid-single-digit range,” Oyibo said. “What we’ve seen so far is a slowdown across the entire category, across all price points and across all segments. So it’s a little bit earlier and a little bit bigger than what we thought.”

Ulta previously guided Comparable sales growth in 2024 between 4% and 5%, with the first half in the low single digits and the second half in the mid single digits.

The company now expects first-quarter comparable sales to be at the lower end of the low-single-digit range provided in the first-half guidance.

CEO Kimball said consumers were still “passionate about beauty” but highlighted growing economic pressures.

“The level of engagement we’re seeing – across social media, in our stores and online, and across every touchpoint we have – continues to be very strong,” Kimball said. “But there’s a lot going on. Economically, the data is pretty mixed.”

Kimball noted healthy employment rates and wage growth, but added that there are pressures from rising credit card debt and student loan dynamics. More generally, there are political challenges and global conflicts in the midst of an election year, he said.

ULTA stock fell 14.5% on Wednesday after the comments. Beauty sector stocks in general have felt some of this backlash. Estee Lauder (HE) fell by 4.2% while Coty (COTY) fell by 5%.

Elf Beauty Stock

ELF stock fell 10% on Wednesday, falling significantly below its 50-day moving average And 10 week line. A sharp move below either line in high volume indicates a sell signal.

On Wednesday, trading volume exceeded 272% of the daily average, Market increase the data shows.

Shares rose nearly 151% from their Oct. 31 low to their March 4 all-time high of 221.83. The company at the beginning of February beat third-quarter estimates and raised outlook. However, Elf’s profit growth has slowed over the past three quarters, after posting triple-digit gains.

Investors who bought at the 139.85 entry saw shares rise nearly 59% to a March 4 high. The stock had pared that gain to about 33% as of Tuesday’s close, ahead of Wednesday’s sell signal.

Elf Beauty has a 95 Composite score on a best possible 99. The Composite Score combines various technical indicators into one easy-to-read score. The stock has a 98 EPS rating. the self line of relative force is down from its early March highs and it has a 96 RS classification.

Elf Beauty leads the Cosmetics/Personal Care group according to Checking ITN stocks.

Despite Wednesday’s drop, ELF stock is up 16.9% in 2024.

You can follow Harrison Miller for more stock news and updates on X/Twitter. @IBD_Harrison

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