On November 20, 2024, Muddy Waters Research (Muddy Waters) published a report entitled e.l.f. Beauty, Inc. A Revenue and Inventory Mystery, alleging that Elf had materially overstated revenue over the past three quarters, and that in Q2 FY24, ELF management realized its growth narrative was in trouble as its inventory built. It appears that ELF then began reporting inflated revenue and profits. Its reported inventory also appears materially inflated as a result - i.e., to account for cash that has not really come in. Further, Muddy Waters accused the Company of concealing its inventory challenges from investors by falsely attributing its rising inventory levels to supposed changes in its sourcing practices rather than the true cause"insufficient sales.