Cosmetics giant E.l.f. Beauty outperforms predictions, agrees to acquire Hailey Bieber's skincare brand Rhode for a potential $1 billion price tag.
E.l.f. Beauty Surpasses Estimates, Acquires Rhode Skincare for $1 Billion
In a significant move, E.l.f. Beauty (ELF) has announced the purchase of skincare brand Rhode, founded by model Hailey Bieber, for up to $1 billion. The deal, which will see E.l.f. pay $800 million in cash and stock at closing, could potentially grow by another $200 million depending on Rhode's growth over the next three years.
E.l.f. reported a robust fourth-quarter performance for fiscal 2025, with adjusted earnings per share of $0.78 and net sales of $332.6 million—both figures surpassing analysts' expectations. The company attributed this growth to strong retailer and e-commerce sales, as well as market performance in the US and internationally.
CEO Tarang Amin expressed optimism, stating that E.l.f. has the strategy to drive continued growth in the beauty industry and that the acquisition of Rhode will further strengthen their portfolio of fast-growing, disruptive brands.
The Rhode acquisition includes $600 million in cash and $200 million in stock at closing, with the possibility of an additional $200 million based on future growth. E.l.f. anticipates the transaction to close in its fiscal 2026 second quarter.
Hailey Bieber will continue as Rhode's Chief Creative Officer and Head of Innovation post-acquisition, while also serving as a Strategic Advisor to the combined companies. Bieber expressed her excitement, citing the partnership as an opportunity to reach more customers with innovative products and broaden distribution globally.
Despite the day's gains, shares of e.l.f. Beauty have seen a nearly 10% decrease year-to-date.
Rhode, established in 2022, gained popularity through a minimalistic approach, offering 10 products in simple packaging and focusing on the concept of "one of everything really good" for accessible, clean, effective beauty routines. With Bieber's large social media following and her advocacy for simple skincare, the brand created viral trends and resonated with younger, digitally savvy consumers, achieving over $212 million in net sales for the 12 months ending March 31, 2025.
Under this new partnership, Rhode is expected to benefit from e.l.f.'s retail relationships, marketing expertise, and operational efficiencies, potentially leading to expanded distribution and continued innovation in the skincare-makeup space.
- E.l.f. Beauty, following the successful acquisition of Rhode, is now poised to delve into new areas of finance, potentially exploring trading opportunities in the fashion-and-beauty sector.
- As Hailey Bieber prepares to continue her role as Rhode's Chief Creative Officer and Head of Innovation post-acquisition, she may find herself drawn to explore innovative business models and processes, merging her lifestyle with the growth of the brand.
- With the growth of E.l.f. Beauty's portfolio, including the addition of Rhode, and the increasing popularity of clean, effective beauty products in the market, investors may now see it as a promising venture for ICO investments in the future.
