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Dive Brief:
As it grows its skin care assortment, E.l.f. Beauty on Wednesday announced it would acquire Rhode, Hailey Bieber’s beauty brand, for $1 billion. The deal is subject to customary closing conditions and should be complete in E.l.f’s Q2 of fiscal 2026.
The acquisition consists of $800 million at closing and an additional $200 million payout based on performance over the next three years. The initial price will be financed by $600 million of fully committed debt financing and $200 million in newly issued E.l.f. shares.
The news came as E.l.f. reported fourth-quarter and fiscal year 2025 earnings, with net sales growing 4% in the quarter to almost $333 million and 28% for the year, reaching $1.3 billion. It was the brand’s 25th consecutive quarter of net sales growth and market share gains.
Dive Insight:
Just two years after acquiring skin care brand Naturium, E.l.f. Beauty has snapped up its next big brand in Rhode.
“We have a very high bar for M&A, given the strong organic growth we’ve been able to deliver, and only act when we find a win-win force multiplier,” E.l.f. Beauty CEO Tarang Amin said on an earnings call Wednesday.
The executive noted that it kept Naturium’s entire team when it acquired that brand in 2023 and used “each company’s strengths to further accelerate the combined business.” With E.l.f.’s help, Naturium expanded into Ulta Beauty, Boots U.K. and Shoppers Drug Mart, according to Amin.
The retailer plans to take a similar approach with Rhode. Bieber will operate as the brand’s chief creative officer and head of innovation and serve as a strategic adviser to both companies. The brand’s co-founders, Michael D. Ratner and Lauren Ratner, as well as CEO Nick Vlahos, will continue running Rhode in Los Angeles. The brand will launch in all Sephora U.S. and Canada stores this fall and in the U.K. by the end of the year. E.l.f. Beauty plans to further move Rhode into distribution through its own deep ties to retail partners.
“Rhode’s unique fashion-forward aesthetic and lifestyle approach to beauty has driven success and scale across multiple product categories: cosmetics, skin care and accessories,” Amin said. Rhode, which was only founded in 2022, netted sales of $212 million in the last 12 months, selling DTC only and with just 10 products in its assortment, the executive noted.
Amin also said that he believes strongly in the longevity of Rhode, given Bieber’s status as “well beyond a celebrity,” and the brand’s ability to make as much revenue as it has so far. “She’s one of the most thoughtful founders I’ve ever met,” Amin said.
E.l.f. already owns two of the fastest growing mass skin care brands in E.l.f. Skin and Naturium, and Rhode provides another entry point into skin care, in addition to other beauty categories. Rhode also holds a place in the more prestige side of the beauty market and opens up E.l.f. to that opportunity. E.l.f. plans to invest further in Rhode’s marketing to increase brand awareness, build on the brand’s digital capabilities and broaden the brand’s assortment over time. Amin also stressed the ability for both brands to learn from each other, with the executive stressing that the acquisition of Naturium helped improve E.l.f. Skin as well.
E.l.f. Beauty isn’t providing guidance for the upcoming fiscal year “due to the wide range of potential outcomes related to tariffs,” though the retailer is focused on mitigating the impacts where it can. To that end, the company announced it would raise prices by $1 beginning Aug. 1, which impacts all SKUs and all brands globally. It’s the third price increase the company has instituted in its 21-year history, Amin said.
