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Hale Bieber attends the “Great Britain” party from Hale Bieber to Chiltern Firehouse on May 17, 2023 in London, England.
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Elf beauty The Hailey Bieber Rhode Beauty Beauty Beauty Plant is up to $ 1 billion if Cosmetics seeks to expand further on skin care.
According to Factset, the acquisition is the largest in Elf history – it consists of $ 800 million in cash and stocks, as well as additional potential payments of $ 200 million based on the results of the genus over the next three years. The transaction is expected to close in the second quarter of the financial 2026 company – or this year.
“I was 34 years old and I was surprised to see this brand over time. In less than three years, they moved from scratch to $ 212 million, only 10 products directly. “So the level of disruption certainly attracted our attention.”
In the news release, Bieber said she was glad to cooperate with Elf to bring her brand to “more faces, places and spaces”.
“From the first day, my native vision was to do the necessary skin care and hybrid makeup that you can use every day,” Bieber said. “Only three years in this journey, our partnership with Elf Beauty means an incredible opportunity to raise and speed our ability to reach more community with even more innovative products and expand our distribution worldwide.”
On Thursday, the ELF shares increased by 11% after the company announced the acquisition and released the results for its financial fourth quarter. The campaign was headed by the quarterly estimates of Wall Rate, but did not offer recommendations from the change in Trump administration tariff policy. Elf receives a disproportionate amount of its products from China.
The Goldman Sachs Analytics note on Thursday said they are considering the Rhode transaction “as a strategic positive one as it further expands ELF to skin care with the Prestige brand and diversify its client base.”
“While Rhode is a DTC brand, it is expected to make sure the retail, including the SEPHORA, which, in our opinion, will support growth forward,” they added.
Why Elf makes bet on rhode
Launched in 2022, Rhode has doubled its client base over the last year and has brought $ 212 million for 12 months, ending on March 31. The company’s growth is basically passed through its web -resort, but plans to run in SEPHORA stores across North America and UK by the end of the year.
As part of the acquisition of Bieber, he will fulfill the duties of the Chief Creative Director of the family and the head of innovation, who overseeing creative, innovation of products and marketing. The brand was launched with two co -founders Michael and Lauren Ratner, but the influence and name of Bieber turned it into a billion dollars.
Under her leadership, last year became a skin care brand # 1 in the media-albo impact, except for paid advertising-increased compared to 367% compared to last year.
Rod is a solid match for Elf, which has recently been heavily growth. The company has legion internet supporters and is known for Tiktok Marketing, which feels more natural for consumers.
The company also seeks to delve into skin care, which has become more popular in all age groups, especially the younger, Elf consumer. In 2023, he purchased a 355 million skincare brand for Naturium. Its purchase of Rhode will allow it to rely on skin care and reach a higher income consumer.
“Elf Cosmetics is about $ 6.50 in its main entrance price, on average, 20, so I would say it brings us another consumer as a whole, but the same approach is how we are engaged and entertained,” said Amen.
The transaction makes sense for Elf, and it was a competitive step to hook the brand before the opponents, but it comes in an uncertain and difficult time for the company. Even with the expected price increase, the tariffs for China are likely to reduce ELF profits over time, and this is the financing of $ 600 million with debt deals during high interest rates.
Acquisition is a rate that consumers will continue to spend high-grade skin care, even during a potential economic slowdown or recession.
Elf knocks down the profits
The elf made a statement when he published the results of the financial fourth quarter, which won the Wall -Rate expectations on the upper and lower line.
Here’s how the beauty retailer compared to what Wall -Rate was waiting, based on LSEG analysts:
- Profit per share: 78 cents, adjusted against 72 cents expected
- Income: 333 million dollars against $ 328 million expected
The company’s net profit has been reported over the three -month period, which ended on March 31, amounted to $ 28.3 million, or $ 49 per share, compared to $ 14.5 million, or 25 cents per share, a year earlier. Sales have increased to $ 332.7 million, which is 4% compared to $ 321.1 million.
Elf sales have increased rapidly in recent years, but investors have grown because this growth has begun to slow down, and the threat of tariffs has begun to weigh its business. The source company is about 75% of its products from China, which is currently faced with 30% of the US export duty last week, it has announced plans to raise $ 1 prices to offset higher tariff costs starting August 1.
While US duties on Chinese import is now 30%, it may change as president Donald Trump Negotiations with Beijing. As a result, the elf said he did not provide the tax 2026 “out of a wide range of potential results related to tariffs.”
Amen said Elf paid more than 145% of duties before Trump agreed to cut Chinese goods but did not go in the quarter and would appear when the company reports its financial salaries in the first quarter in 2026.
