E.l.f. Beauty Reports Mixed Results Amid Rhode Acquisition
E.l.f. Beauty experienced a 14% growth in its latest quarter driven by strong demand for Rhode, a brand founded by Hailey Bieber. However, shares dropped as much as 29% after the company issued a sales outlook that fell below market expectations.
Rhode's Contribution and Future Projections
In its first earnings report post-acquisition, E.l.f. Beauty projected Rhode would grow 40% in 2025 and contribute $200 million to the combined company’s sales in the current fiscal year.
Sales Performance and Market Reaction
Despite Rhode’s strong performance, it was not enough to counterbalance slowing growth at E.l.f. Beauty overall. Sales in the second quarter reached $344 million, a 14% increase, but still fell short of expectations. The company forecasted full-year growth of 18–20%, targeting $1.57 billion in sales, below the average analyst estimate of $1.65 billion.
Shares plunged by as much as 29 percent in after-hours trading.
Rhode's Sephora Launch Success
Rhode's launch at Sephora North America on September 4 was notably successful, described by CEO Tarang Amin as “by far the biggest launch Sephora North America has ever seen,” more than doubling the initial sales of the previous record holder.
“Rhode took $15 million in sales in its first two days at Sephora,” according to a TD Cowen research note.
Prior Sales Trends and Outlook
Before its Sephora debut, Rhode had achieved $40 million in quarterly sales through June 30, indicating a slowdown. E.l.f. Beauty now forecasts Rhode’s growth to reach $300 million for the brand’s calendar year.
Summary: E.l.f. Beauty's recent quarter was buoyed by Rhode’s strong launch and growth, yet slower-than-expected overall sales prompted a significant drop in shares despite optimistic projections for Rhode's future expansion.
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