E.l.f. Beauty announced its acquisition of Hailey Bieber's skincare brand, Rhode, in a deal valued at up to $1 billion, marking the company’s largest acquisition to date. This strategic move aims to strengthen E.l.f.'s position in the skincare market and expand its reach to higher-income consumers.
The transaction consists of $800 million in cash and stock, with an additional $200 million contingent on Rhode’s performance over the next three years. The acquisition is expected to finalize in the second quarter of fiscal 2026, or later this year.
Tarang Amin, CEO of E.l.f. Beauty, expressed his admiration for Rhode’s remarkable growth. “In less than three years, they’ve reached $212 million in net sales, direct-to-consumer only, with just 10 products. I didn’t think that was possible,” he said in an interview with CNBC.
Hailey Bieber, co-founder and public face of Rhode, will take on the role of Chief Creative Officer and Head of Innovation. She emphasized her enthusiasm about the partnership: “From day one, my vision was to create essential skincare and hybrid makeup for daily use. This collaboration with E.l.f. Beauty will enable us to innovate further and expand our global presence.”
Since its launch in 2022, Rhode has quickly scaled its customer base and revenue, primarily through its online platform. The brand plans to extend its distribution by launching in Sephora stores across North America and the U.K. before year-end. Rhode’s success is highlighted by its status as the leading skincare brand in earned media value, with 367% year-over-year growth.
This acquisition complements E.l.f.’s digital marketing expertise and its strategy to deepen its skincare portfolio, which already includes the 2023 purchase of Naturium for $355 million. Rhode’s higher price point diversifies E.l.f.’s customer profile, offering access to more affluent consumers, while retaining E.l.f.’s focus on engaging and entertaining audiences through natural online campaigns.
Despite the promising outlook, challenges remain. E.l.f. faces uncertainty due to fluctuating U.S.-China tariffs impacting its supply chain and is financing a substantial portion of the deal through debt amid rising interest rates. The company declined to provide full fiscal 2026 guidance due to these unpredictable tariff-related factors.
Simultaneously, E.l.f. posted strong fourth-quarter fiscal results, beating Wall Street estimates with earnings per share of 78 cents (adjusted) versus 72 cents expected, and $333 million in revenue compared to $328 million anticipated. Net income rose to $28.3 million from $14.5 million the prior year, while sales increased 4% year-over-year.
Looking ahead, E.l.f. announced plans to raise product prices by $1 starting Aug. 1 to offset increased costs from tariffs, acknowledging the ongoing complexities of global trade negotiations. CEO Amin noted prior tariffs exceeded 145% before reductions under the previous U.S. administration, with the financial impact expected to be reflected in upcoming quarterly earnings.
The acquisition of Rhode represents a significant bet on continued consumer demand for high-end skincare amid economic uncertainties, positioning E.l.f. for sustained growth in this competitive segment.
