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  "documentTitle": "e.l.f. Beauty, Inc. (ELF)",
  "authorId": "51_Muddy_Waters",
  "authorName": "Muddy Waters Research",
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  "presentationDate": "2024-11-20 00:00:00",
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  "notes": "The slide outlines the logic for adjusting reported inventory figures to isolate U.S.-specific product inventory, highlighting accounting red flags regarding in-transit inventory.",
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      "text": "We discussed earlier that we understand ELF generally always purchased EXW or FOB Origin, and that this supposed change is therefore a significant red flag.",
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      "text": "In Q2 FY24, ELF announced a change to its inventory accounting whereby it purported to have suddenly begun taking title to inventory in China – i.e., purchasing FOB Origin (Free on Board) or EXW (Ex-Works). We exclude these amounts. Elf disclosed the in-transit inventory amounts from Q2 FY24 through Q1 FY25, leaving us to estimate only Q2 FY 25 in-transit inventory. (We discussed earlier that we understand ELF generally always purchased EXW or FOB Origin, and that this supposed change is therefore a significant red flag.)",
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      "text": "In Q3 FY24, ELF acquired Naturium, which sells products made in the U.S. Therefore, imports should not impact this inventory. ELF disclosed the Naturium inventory levels for Q3 FY24 through Q1 FY25, leaving us to estimate only Q2 FY25 Naturium inventory.",
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      "text": "ELF sells products overseas, which presumably would not be imported into the U.S., thereby not being captured by our import databases. We therefore need to estimate the amount of inventory ELF holds outside the U.S. to arrive at the portion of reported inventory that covers ELF products in the U.S.",
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      "text": "Estimating How Much of Reported Inventory Would be Elf Product in the U.S.",
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