E.l.f. Beauty Shares Plunge as Sales Fall Short
Despite strong demand for Rhode driving 14 percent growth in E.l.f. Beauty’s latest quarter, the company’s shares fell by up to 29 percent after a disappointing sales outlook. The brand, founded by Hailey Bieber, was acquired earlier this year and is forecast to grow by 40 percent in 2025, contributing $200 million to E.l.f.’s fiscal results.
However, Rhode’s success did not offset slowing sales in E.l.f.’s core business. Second-quarter results came in below Wall Street expectations, and full-year growth is projected at 18 to 20 percent, reaching $1.57 billion in revenue—below the anticipated $1.65 billion average estimate.
In the second quarter, total sales climbed 14 percent to $344 million, buoyed by Rhode’s impressive retail debut. The brand’s launch at Sephora on September 4 set a new benchmark for the retailer.
“It was by far the biggest launch Sephora North America has ever seen,” said E.l.f. Beauty CEO Tarang Amin. He added that Rhode’s initial sales more than doubled those of the previous record holder.
Analysts at TD Cowen reported that Rhode generated $15 million in its first two days at Sephora. Yet Securities and Exchange Commission filings show the brand’s quarterly sales totaled $40 million through June 30, signaling a slowdown. Looking ahead, the company forecasts Rhode’s sales to expand 40 percent to reach $300 million in 2025.
Author Summary
E.l.f. Beauty’s stock plunged after a weak sales forecast, as Rhode’s rapid rise couldn’t fully balance slowing core growth and investor disappointment.