e.l.f. Beauty’s Stock Plummets Following Rhode Acquisition Announcement

NEW YORK, N.Y. — e.l.f. Beauty‘s stock fell 29% on Wednesday after the company announced disappointing full-year revenue guidance despite the expected boost from its recent acquisition of Rhode, the cosmetics line owned by Hailey Bieber. The announcement came during a significant decline in the company’s stock value on September 5, 2025.

CEO Tarang Amin stated in a CNBC interview that Rhode is projected to add $200 million to e.l.f.’s annual sales this fiscal year and $300 million on an annual run rate basis. However, the company’s full-year revenue forecast is estimated to be between $1.55 billion and $1.57 billion, falling short of analysts’ expectations of $1.65 billion, according to LSEG.

The acquisition of Rhode, completed earlier this year for $1 billion, highlights the importance of the brand to e.l.f.’s growth. Rhode is anticipated to contribute approximately 13% to e.l.f.’s revenue forecast, which reflects the company’s need for growth as its overall sales moderate.

For the fiscal second quarter, e.l.f. reported a net income of $3 million, or 5 cents per share, down from $19 million, or 33 cents per share, a year earlier. Adjusted earnings per share were lower than the expected $3.58, coming in between $2.80 and $2.85.

Total sales increased about 14%, reaching $344 million, up from $301 million the previous year. Amin noted that the lack of guidance released last quarter affected revenue estimates and contributed to the company’s performance misses. He expressed confidence in the strength of the sales and guidance provided.

However, profitability has been impacted by the new tariffs imposed by the Biden administration. In the latest quarter, e.l.f.’s net income fell by 84%, and the company’s gross margin decreased by 1.65 percentage points due to higher tariff costs. Amin mentioned a price increase of $1 on products effective August 1 as a direct response to tariffs.

Rhode, having launched in Sephora stores nationwide in September, is being positioned as a primary growth driver for e.l.f. with a growth rate of approximately 40% year over year. Amin described its launch as the largest in Sephora’s North American history, outperforming the company’s second biggest launch by 2.5 times.

Amin expressed optimism about Rhode’s potential for expansion, not only in North America but also in international markets like the UK. He believes the brand’s growth prospects are significant and have the potential to evolve beyond its current status.