E.l.f. Beauty Shares Plummet After Sales Disappoint
Strong demand for Rhode helped E.l.f. Beauty achieve 14% growth in its latest quarter. However, the company's shares dropped up to 29% following a sales outlook below expectations.
Rhode Acquisition and Growth Projections
This was E.l.f. Beauty's first earnings report after acquiring Rhode, the brand founded by Hailey Bieber. The company forecasted Rhode would grow 40% in 2025 and contribute $200 million to combined sales in the current fiscal year.
Sales Performance and Forecast
Despite Rhode’s strong results, slowing growth at E.l.f. affected overall performance. Second quarter sales reached $344 million, up 14%, but fell short of expectations. The company predicted full-year sales growth of 18–20%, targeting $1.57 billion, which was below the analyst average forecast of $1.65 billion.
"Rhode’s Sephora launch on Sept. 4 was by far the biggest launch Sephora North America has ever seen," said E.l.f. Beauty CEO Tarang Amin to The Business of Beauty. The launch more than doubled initial sales of the previous record holder.
Research by TD Cowen noted Rhode made $15 million in sales during its first two days at Sephora. However, SEC filings revealed Rhode’s quarterly sales slowed to $40 million through June 30 prior to the Sephora debut.
The company expects Rhode’s sales to grow 40% to reach $300 million in calendar year 2025.
Summary
E.l.f. Beauty faces pressure as Rhode’s strong growth is overshadowed by slower sales momentum and conservative full-year forecasts.
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