Grocery Outlet, Sleep Number, Noodles, e.l.f. Beauty, and Oxford Industries Shares Plummet, What You Need To Know

What Happened?

A number of stocks fell in the morning session after markets continued to decline, as investors grew cautious ahead of a key speech by Federal Reserve Chair Jerome Powell. The move came as U.S. equity markets recorded a fifth consecutive day of losses for major indexes like the S&P 500, with technology stocks experiencing the largest declines. Investors have grown wary that the sharp rally in the tech sector since April may have advanced too far. The market-wide caution is largely driven by the upcoming Jackson Hole symposium, a meeting of central bankers, where traders are anxiously awaiting Fed Chair Powell's speech on Friday for guidance on the future path of interest rates.

The stock market overreacts to news, and big price drops can present good opportunities to buy high-quality stocks.

Among others, the following stocks were impacted:

• Grocery Store company Grocery Outlet (NASDAQ:GO) fell 3.2%. Is now the time to buy Grocery Outlet? Access our full analysis report here, it’s free.
• Home Furniture Retailer company Sleep Number (NASDAQ:SNBR) fell 3.6%. Is now the time to buy Sleep Number? Access our full analysis report here, it’s free.
• Modern Fast Food company Noodles (NASDAQ:NDLS) fell 3.2%. Is now the time to buy Noodles? Access our full analysis report here, it’s free.
• Personal Care company e.l.f. Beauty (NYSE:ELF) fell 4.5%. Is now the time to buy e.l.f. Beauty? Access our full analysis report here, it’s free.
• Apparel and Accessories company Oxford Industries (NYSE:OXM) fell 3.6%. Is now the time to buy Oxford Industries? Access our full analysis report here, it’s free.

Zooming In On e.l.f. Beauty (ELF)

e.l.f. Beauty’s shares are extremely volatile and have had 49 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful but not something that would fundamentally change its perception of the business.

The previous big move we wrote about was 7 days ago when the stock dropped 3.4% on the news that markets pulled back amid hotter-than-expected inflation data. The main concern for investors was the July Producer Price Index (PPI), a measure of wholesale inflation. The higher-than-expected reading suggests that companies could face squeezed profit margins due to rising costs. This also reduces the likelihood of the Federal Reserve cutting interest rates, which could further dampen economic activity. Compounding these inflation fears are multiple reports signaling a weakening consumer.

e.l.f. Beauty is down 6.5% since the beginning of the year, and at $114.94 per share, it is trading 32.8% below its 52-week high of $170.95 from August 2024. Investors who bought $1,000 worth of e.l.f. Beauty’s shares 5 years ago would now be looking at an investment worth $6,196.

Today’s young investors won’t have read the timeless lessons in Gorilla Game: Picking Winners In High Technology because it was written more than 20 years ago when Microsoft and Apple were first establishing their supremacy. But if we apply the same principles, then enterprise software stocks leveraging their own generative AI capabilities may well be the Gorillas of the future. So, in that spirit, we are excited to present our Special Free Report on a profitable, fast-growing enterprise software stock that is already riding the automation wave and looking to catch the generative AI next.