From Yahoo Finance: 2025-06-03 20:00:00

E.l.f. Beauty’s growth is slowing down, with near-term performance impacted by tariffs. To combat this, the company is making moves to reduce dependence on China and boost growth. The recent acquisition of Rhode cosmetics, developed by Hailey Bieber, along with positive earnings, has investors optimistic about the brand’s future.

In its fiscal 2025 fourth-quarter report, e.l.f. Beauty beat analyst expectations with a 4% revenue increase year over year to $332.6 million. However, this growth is a significant slowdown for the company, which previously posted high double-digit growth. Management’s decision to not provide guidance adds to market uncertainty due to high exposure to Chinese production and tariff impacts.

To address the tariff situation, e.l.f. Beauty is raising product prices by $1, diversifying its supply chain, and expanding internationally. The acquisition of Rhode cosmetics aligns with the brand’s target market and product innovation strategy. Additionally, Rhode’s luxury brand status could improve e.l.f.’s gross margins and provide access to new distribution channels like Sephora.

E.l.f. Beauty’s acquisition of Rhode cosmetics is part of a strategy to compete with larger cosmetics companies like Estee Lauder and L’Oreal. The acquisition brings clear benefits to e.l.f., with Rhode doubling its consumer base and generating significant sales. This move, along with other growth initiatives, positions e.l.f. for long-term success in the cosmetics industry.

Read more: Can Hailey Bieber Bring e.l.f. Stock Back to Life?