Plaintiff Felipe Peerally filed the suit on April 16, targeting CEO Tarang Amin, CFO Mandy Fields, and nine current and former directors. The complaint covers the period from May 25, 2023 through February 6, 2025.
According to the complaint, defendants observed declining sales from major retailers, rising inventory levels, and repeated failures of key innovation products. Despite these warning signs, the defendants told investors the company was ordering more inventory to meet strong demand, the suit alleges.
The complaint alleges the concealment began to unravel on Aug. 8, 2024, when E.L.F. Beauty disclosed weaker-than-expected guidance. The stock dropped more than 14% in a single day, according to the suit.
A second disclosure followed on Feb. 6, 2025, when the company reduced its fiscal 2025 revenue and adjusted EBITDA guidance, citing slower new product performance, lower demand trends, and challenging category conditions, according to the complaint. The stock fell $17.36 per share, or 19.90%, closing at $71.13 on Feb. 7, 2025, down from $88.49 the previous day, the suit alleges.
Peerally's counsel served a litigation demand on the board on June 13, 2025, the complaint states. The board responded in a Sept. 29, 2025 letter deferring the demand "until a later point in time," according to the complaint. A related securities class action was filed March 6, 2025, as case No. 5:25-cv-02316.
The case is Peerally v. Amin et al., No. 3:26-cv-03167, in the U.S. District Court for the Northern District of California.