Spruce Point says it is short e.l.f. Beauty

Spruce Point Capital Management issued a detailed report entitled “The Ugly Elf” that outlines why we believe shares of e.l.f. Beauty face up to 45% to 65% long-term downside risk, or $34.35 – $54.00 per share. Spruce Point’s Ben Axler says the firm has “grave” concerns about e.l.f. Beauty, with several material risk factors “lurking under the radar” undetected by the company’s investors, customers, employees and retail partners, adding that the most concerning relates to “an extreme lapse in ethical judgment surrounding its vendor partnerships.” “We call on e.l.f’s Board to conduct a complete investigation into our findings and urge e.l.f’s major retail partners such as Target, Walmart and Ulta Beauty to evaluate the Company’s alignment with their corporate values as well as the policies dictated in their supplier codes of conduct,” Axler said.