E.l.f. Beauty Acquires Hailey Bieber’s Skincare Brand Rhode

E.l.f. Beauty has announced a groundbreaking deal to acquire Hailey Bieber’s skincare line, Rhode, in a transaction valued at up to $1 billion. This acquisition marks a pivotal moment for E.l.f. as it aims to expand its footprint in the skincare market, appealing to a higher-income consumer base.

The deal comprises $800 million in cash and stock, along with an additional potential $200 million contingent on Rhode’s performance over the next three years. This acquisition, which is E.l.f.’s largest to date, is expected to close in the second quarter of its fiscal year 2026, signaling a strategic move that may reshape the cosmetic company’s product offerings.

Rhode’s Rapid Growth Turned Heads

Hailey Bieber’s Rhode has proven to be an impressive contender in the skincare space, generating a notable $212 million in net sales within just two years of its inception. According to E.l.f. CEO Tarang Amin, this growth is unprecedented, especially considering Rhode’s success has come solely from direct-to-consumer sales of just ten products.

Amin expressed his astonishment, stating, “I’ve been in the consumer space for 34 years, and I’ve been blown away by seeing this brand over time.” He further emphasized the significance of Rhode’s performance in attracting E.l.f.’s interest.

Regarding the collaboration, Hailey Bieber remarked, “From day one, my vision for Rhode has been to make essential skincare and hybrid makeup you can use every day.” The partnership with E.l.f. is expected to elevate the brand’s presence and introduce innovative products to a wider audience.

Strategic Alignment with E.l.f.’s Vision

Rhode, launched in 2022, has already garnered substantial media attention, becoming a top skincare brand in earned media value, with a staggering 367% year-over-year growth. As part of the acquisition, Bieber is set to assume the role of chief creative officer for Rhode, overseeing product innovation and marketing initiatives.

E.l.f. Beauty’s previous acquisitions, including the $355 million purchase of Naturium, underscore its commitment to skincare growth. The company aims to engage younger consumers who are increasingly leaning towards skincare products.

Market Dynamics and Consumer Trends

Despite E.l.f. Beauty’s optimistic outlook following this acquisition, the timing presents certain challenges. The rising tariffs on products imported from China, which constitute a significant portion of E.l.f.’s goods, could impact its profitability. E.l.f. has proposed a price increase for its products that will take effect in August to counter these heightened costs.

For E.l.f., acquiring Rhode not only diversifies its product range but also strategically positions the brand in a market that continues to show strong demand for high-end skincare products, regardless of potential economic fluctuations.

Recent Earnings Performance

The acquisition announcement coincided with E.l.f.’s fiscal fourth-quarter earnings report, which exceeded Wall Street’s expectations. The company reported earnings per share of 78 cents, surpassing the expected 72 cents, with revenues reaching $333 million, a slight increase from the previous year.

Despite concerns surrounding the potential adverse effects of tariffs, E.l.f. hopes that the Rhode acquisition will inject new energy into its brand and appeal to consumers willing to invest in high-quality skincare products.

Conclusion: A Bold Step into Skincare

The acquisition of Rhode represents a significant milestone for E.l.f. Beauty, highlighting the brand’s ambition to diversify and grow within the skincare market. As consumers increasingly prioritize skincare, the partnership with Hailey Bieber is expected to further enhance E.l.f.’s offerings and market presence.

FAQ

What is the value of E.l.f.’s acquisition of Rhode?

The acquisition is valued at up to $1 billion, consisting of $800 million in cash and stock, with an additional $200 million based on performance.

How quickly has Rhode grown in sales?

Rhode has generated $212 million in sales in less than three years, primarily through direct-to-consumer channels.

What challenges does E.l.f. face with the acquisition?

E.l.f. faces challenges from rising tariffs on Chinese imports, which could affect its profitability in the future.

What role will Hailey Bieber have in the new partnership?

Hailey Bieber will serve as Rhode’s chief creative officer, focusing on product innovation and marketing strategies.

How has E.l.f.’s financial performance been recently?

E.l.f. reported a fourth-quarter earnings per share of 78 cents, which beat analysts’ expectations and indicated strong revenue growth.