We couldn’t be more proud to share this news from E.l.f. Beauty! They want to buy skincare brand Rhode, from celebrity Hailey Bieber, in a transaction valued at approximately $800 million, plus an additional up to $200 million depending on brand performance over the next three years. This purchase is the harbinger of a huge jump into the big leagues for E.l.f. The company is increasingly diversifying its product portfolio and enhancing its market penetration.
That deal is expected to close in the second quarter of E.l.f .’s fiscal 2026, later this year. Rhode posted record revenue numbers, pulling in $212 million over the last full year ending March 31. Rhode is preparing to introduce its products into Sephora stores throughout North America and the U.K., with plans to do so by year’s end. This initiative will greatly increase the Nudie brand’s representation and availability to consumers.
Specifically, in the fiscal fourth quarter ending March 31, E.l.f. scored a hot $28.3 million in net income. This represents a regular cash dividend of 49 cents per share. During that same time, the company’s sales experienced the same rocket ship growth to $332.7 million. That’s a 4% jump over $321.1 million during the third quarter of last year. These numbers were more than what Wall Street was anticipating. E.l.f. did not offer an outlook for fiscal 2026 due to ambiguities from shifting tariff policies during the Trump administration.
Competitor e.l.f. 19 also largely relies on China, sourcing about three-quarters of its products from the country. Currently, China faces a 30% tariff on shipments to the U.S. In order to offset these tariffs, E.l.f. made news by raising prices by $1, effective August 1. Before they enacted these tariff reductions, the company was already subject to duties over 145%. Fortunately, these costs didn’t hit last quarter’s earnings, but we believe they will show up in subsequent quarterly earnings reports.
Tarang Amin, E.l.f.’s CEO, said they were impressed with how fast Rhode has entered the consumer market.
“I’ve been in the consumer space 34 years, and I’ve been blown away by seeing this brand over time. In less than three years, they’ve gone from zero to $212 million in net sales, direct-to-consumer only, with only 10 products. I didn’t think that was possible,” – Tarang Amin
E.l.f.’s acquisition hand in glove with their longer-term strategy to expand beyond core customers while adding additional product categories. Amin noted that Rhode’s average price point is significantly higher than E.l.f.’s typical offerings.
“E.l.f. cosmetics is about $6.50 in its core entry price point, Rhode, on average, is in the high 20s, so I’d say it does bring us a different consumer set to the company overall, but the same approach in terms of how we engage and entertain them,” – Tarang Amin
Hailey Bieber says she’s thrilled to be collaborating with E.l.f. She pointed to her recent vision for Rhode, which revolves around minimal skincare and hybrid makeup.
“From day one, my vision for rhode has been to make essential skin care and hybrid makeup you can use every day,” – Hailey Bieber
She continued to explain how this partnership would help to expand Rhode’s presence and influence within the beauty industry.
“Just three years into this journey, our partnership with e.l.f. Beauty marks an incredible opportunity to elevate and accelerate our ability to reach more of our community with even more innovative products and widen our distribution globally,” – Hailey Bieber
Beauty company E.l.f. made waves with a positive reception as it announced its acquisition news. Shares dropped nearly 4% in afterhours trading following the announcement and earnings release. Analysts can be found pointing to this decline and indicating that the cause is concern about the potential associated volatility that tariff policy can induce on future earnings.
E.l.f. shows no signs of slowing down on diversifying their offerings and appeal. Through strategic acquisitions, including Rhode, it’s clear that Ulta is looking to bolster its position in the increasingly competitive beauty sphere. The beauty incubator brand had last year acquired skincare brand Naturium for $355 million in 2023.