Latest news with #cosmetics
Forbes
9 hours ago
- Business
- Forbes
E.L.F. Continues To Disrupt The Beauty Business By Acquiring Hailey Bieber's Rhode For $1 Billion
Ever since E.l.f. Beauty came on the scene, it's been in the business of disrupting the beauty industry. 'We were founded in 2004 and have sought to disrupt the traditional beauty model of high prices, long product cycles and traditional advertising,' it stated in its first annual report after going public in 2016. True to its word, it has been remarkably successful, ranking as the number one cosmetics brand in the U.S. in unit sales and number two in dollar share, according to Nielsen. Yet there's no shame in being number two in dollar share since its average unit price is well under that of other cosmetics brands and is likely to remain so even after an across-the-board $1 price increase takes effect in August. Afterwards, 75% of its products will remain under $10. Now E.l.f. has done it again. It's acquired Hailey Bieber's phenomenally successful Rhode brand for $800 million – $600 million in cash and $200 million in stock – payable at closing, expected in the second quarter, with the potential for an additional $200 million payout on the future growth of the brand over the next three years, for a total $1 billion. 'e.l.f. Beauty found a like-minded disruptor in rhode,' e.l.f. chairman and CEO Tarang Amin said in a statement. 'rhode further diversifies our portfolio with a fast-growing brand that makes the best of prestige accessible. We are excited by rhode's ability to break beauty barriers, fully aligning with e.l.f. Beauty's vision to create a different kind of company. rhode is a beautiful brand that we believe is ready for rocketship growth.' This is a hugely big deal for E.l.f., being only its third acquisition since acquiring clean-beauty brand W3ll People, now marketed as Well People, for $27 million in 2020 and skincare brand Naturium for $355 million in 2023. It's also big by recent industry standards, although there have been a few bigger. In 2023, L'Oréal paid $2.5 billion for Aesop – its largest acquisition at the time. But Aesop came with nearly 400 stores, unlike Rhode, which grew to $212 million in sales exclusively via e-commerce and occasional pop-up shops. However, it will launch in Sephora later this year. Also in 2023, Estée Lauder paid $2.8 billion for the Tom Ford brand, but it also included a fashion business, handled by partner Ermenegildo Zegna, and eyewear, now managed by Marcolin. Last year, Estée Lauder followed by completing the $1.7 billion acquisition of Deciem with its flagship The Ordinary skincare brand. However, it has been partnering with Deciem since 2017 after making an initial investment in the brand. Yet the $1 billion price tag for Rhode is a stretch for a brand that has only been in business for three years with a limited ten product range with prices starting at $18 for lip tint to $32 for its signature 'glazing milk,' well above E.l.f. comfort zone. The closest comparable is the $600 million Coty paid for a 51% stake in Kylie Jenner's Kylie Cosmetics with a total $1.2 valuation, but according to Forbes, that partnership has been rocky. In his Substack 'Making Cents' newsletter, Drew Fallon, former CFO of Mad Rabbit and CEO of Iris Finance, wrote, 'For me, the biggest takeaway is honestly the 3 years thing. I can't get over that, it's insane. Combine this with the fact that Rhode's products are innovative (i.e., potentially not durable) and I think this move is ALMOST desperate by E.L.F.' TD Cowen's Oliver Chen shares that concern. 'The main question with the Rhode acquisition is whether the brand has longevity beyond its celebrity hype.' There's no question that Bieber has capitalized on her celebrity status – she's the daughter of actor Stephen Baldwin and married to singer-songwriter and pop-icon Justin Bieber – but Rhode's success goes far beyond that. 'She is a celebrity, but what drove the valuation so high was the authenticity, the community building – 11 million followers on Instagram – and the very methodic and deliberate approach to product development,' shared Dr. Brent Ridge, who with business partner and husband Josh Kilmer-Purcell founded Beekman 1802 goat milk skincare brand. Ridge a great admirer of what E.l.f. and what Bieber and her Rhode team have accomplished. In fact, Beekman 1802 has followed much the same path, what he and Kilmer-Purcell call the principles of 'G.O.A.T. Wisdom,' which they've detailed in a book of the same name. The methodical, deliberate approach to product development that Ridge talks of – and that can also be called disruptive – is exemplified by signature Rhode products. Bieber coined the term 'glazed donut skin' to describe healthy, dewy and glossy skin. Rhode delivers the means to achieve it in a four-step skincare kit. And what Bieber started has turned into a glazed donut skin trend that has inspired many other brands, including E.l.f., which launched 'Donut Forget Putty Primer' in partnership with Dunkin' donuts. Extending beyond beauty, Bieber combined the award-winning Rhode Peptide Lip Tint with a iPhone cell phone case to carry these two everyday essentials everywhere. And Rhode tied the glazed donut skin trend with Peptide Lip Tint in collaboration with Krispy Kreme in a limited edition 'Strawberry Glazed Donut' colored and flavored tint. 'What gave us the conviction for a billion-dollar deal is Hailey and Rhode's track record and what they've been able to build and achieve with such a level of conviction and depth with their community and in the market,' E.l.f.'s Amin said to Vogue Business. 'But the thing that made us interested is that she is a fellow disruptor and that gives me a lot of confidence when I'm looking at a long-term M&A environment.' This deal comes at a pivotal time for E.l.f. Its revenues have grown from $230 million in 2016 – about where Rhode is today – to $1.3 billion in fiscal 2025. Most notably, E.l.f. more than doubled sales over the last two years – 2023 revenue reached $579 million. And it nearly doubled net income over the same period, from $62 million to $112 million this year. However, growth slowed significantly in the most recent fourth quarter, ending Mar. 31. Revenues rose a mere 4% over same period previous year, not bad relative to others in the industry, but way below recent levels. It averaged 56% quarterly growth since 2023 and it hasn't been so slow since 2019. Clearly, the Rhode acquisition will give a boost to E.l.f's growth in the coming quarters as E.l.f.'s dynamic product development engine is expected to help Rhode expand its product range, all the while maintaining its core brand DNA. Bieber will stay as the brand's chief creative officer and head of innovation, as well as act as a strategic advisor to Amin and the combined companies. E.l.f. has another celebrity-founded brand, Keys Soulcare with Alicia Keys. Rhode CEO Nick Vlahos, previously CEO of The Honest Company and prior to that with Clorox and Burt's Bees, will remain with the brand along with co-founders Michael and Lauren Ratner. Michael serves as co-executive chair of Rhode's board and Lauren is President and chief brand officer. 'We can't wait to bring rhode to more faces, places, and spaces. From day one, my vision for rhode has been to make essential skin care and hybrid makeup you can use every day,' Bieber said in a statement. Coming from his G.O.A.T. Wisdom perspective, Dr. Ridge sees the E.l.f.-Rhode partnership as a match made in heaven, 'marrying a business powerhouse that has mastered disruptive marketing and product-market fit with a brand that has successfully de-centered its celebrity founder while still managing to capitalize on her for key moments.' 'Making Cents' Fallon is more reserved. 'In short, this HAS to work. They just bet the company on it. If this is another Kylie Cosmetics moment, E.L.F. will be the next Coty, a stock chart that doesn't look very fun.' See also:
Yahoo
16 hours ago
- Business
- Yahoo
Truist Increased the Price Target for e.l.f. Beauty, Inc. (ELF)
Truist Securities reiterated its Buy rating on e.l.f. Beauty, Inc. (NYSE:ELF) shares, raising its price objective from $75 to $125. A close up of the lip and eye products from the company on a model in a fashion and beauty shoot. The revision comes after the company's improved financial outlook and solid Q4 earnings performance. After revising its FY26 projections, Truist now forecasts $1.575 billion in sales and $332 million in EBITDA, up from the earlier projections of $1.466 billion and $327 million. Furthermore, the firm's confidence in e.l.f. Beauty, Inc. (NYSE:ELF)'s sustained development trajectory was reflected in the raised FY27 expectations. After Q4 earnings above market projections, the latest estimates indicate an upward revision in long-term expectations. Recently, e.l.f. Beauty, Inc. (NYSE:ELF) strengthened its portfolio by paying $1 billion to purchase Rhode, a celebrity beauty brand. The company has generated strong sentiment due to its industry-leading gross margins of 71.24%, $6.30 billion market capitalization, and 28.28% revenue growth over the last 12 months. Targets have also been raised by other firms, such as TD Cowen, Jefferies, Morgan Stanley, and Piper Sandler, with values ranging from $105 to $130. Analysts view e.l.f. Beauty, Inc. (NYSE:ELF)'s tactical moves and fundamentals as drivers for further rise, notwithstanding the macro uncertainty of the near future. While we acknowledge the potential of ELF to grow, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and have limited downside risk. If you are looking for an AI stock that is more promising than ELF and that has 100x upside potential, check out our report about this READ NEXT: and . Disclosure. None.
Bloomberg
a day ago
- Business
- Bloomberg
Stock Movers: Elf, Gap, Texas Pacific
- Ulta Beauty (ULTA) shares surged the most since 2020 after delivering first-quarter results that topped Wall Street estimates, signaling that shoppers are buying up beauty products despite growing economic concerns. Profit last quarter was $6.70 a share, the company said Thursday after markets closed, beating analyst expectations for $5.80. Comparable sales were also higher than expected. The company boosted its full-year outlook for sales and profit. The better-than-expected results bode well for the turnaround plan led by Steelman as growing economic worries push consumers to pull back spending elsewhere. The company's effort in part leans on exclusive products such as a new hair-care line from Beyoncé. - Elf Beauty (ELF) shares surged on Thursday, after the cosmetic company agreed to acquire Hailey Bieber's beauty brand, Rhode, for $1 billion. - Texas Pacific Land (TPL) fell for its eighth consecutive day on Thursday, its longest losing streak since April 2023.
Wall Street Journal
a day ago
- Business
- Wall Street Journal
The Score: E.l.f. Beauty, Tesla, Nvidia, and More Stocks That Defined the Week
The Score is a weekly review of the biggest stock moves and the news that drove them. E.l.f. Beauty ELF 0.58%increase; green up pointing triangle is acquiring Hailey Bieber's beauty brand, giving the cosmetics company's stock a major glow-up.
CNN
a day ago
- Business
- CNN
e.l.f. Beauty raises prices by $1 due to tariffs
e.l.f. Beauty raises prices by $1 due to tariffs E.l.f. Beauty CEO Tarang Amin speaks to CNN about why the company is increasing prices by $1 across its entire portfolio on August 1. On Wednesday, the cosmetic company announced it bought Hailey Bieber's beauty brand, rhode, for $1 billion. Amid President Donald Trump's chaotic trade war with China, e.l.f. hopes the acquisition is an opportunity to diversify its supply chain. Right now, about 75% of e.l.f. products are made in China, while rhode has suppliers in Europe, the U.S. and other parts of Asia. 01:24 - Source: CNN Elephant seal in Cape Town wanders into suburbia, stops traffic and wins the hearts of locals A Southern elephant seal makes a surprise visit to the residential neighborhood of Gordon's Bay in Cape Town, South Africa, and triggers an almost nine-hour rescue effort to return him to the coast. 00:57 - Source: CNN Why e.l.f. just bought Hailey Bieber's beauty brand for $1 billion e.l.f. Beauty is buying Hailey Bieber's makeup brand, Rhode, for $1 billion. Founded in 2022, Bieber's brand racked up $212 million in net sales in its last fiscal year. 01:11 - Source: CNN Contestants risk injury in cheese wheel competition An annual race held in England has attracted thousands around the world. It's been described as the world's most dangerous race: a 200-yard dash after a wheel of Gloucester cheese. 01:15 - Source: CNN Should Sean 'Diddy' Combs testify? CNN's Laura Coates speaks with Benjamin Chew, co-lead counsel for Johnny Depp in his defamation trial, about whether Sean "Diddy" Combs should testify in his high stakes criminal trial. 01:55 - Source: CNN SpaceX Starship outperforms previous missions this year Regrouping after two consecutive explosions, SpaceX launched the 9th test flight of Starship, the most powerful rocket ever built. 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Capricorn alleges Combs made threats and carried out acts of violence against her, including forced lie-detector tests Capricorn claims to have been administered by Combs' security guard while she was held. 02:37 - Source: CNN All-American Rejects singer talks house party tour The All-American Rejects lead singer Tyson Ritter joined CNN News Central to talk about his band's house party tour that started as a protest against pricey arena shows. 01:34 - Source: CNN 'Duck Dynasty' star dies at 79 Phil Robertson, patriarch of the reality show 'Duck Dynasty,' has died at 79, according to a family statement. Robertson founded Duck Commander, a business making duck hunting supplies, which later became the center of A&E's hit show. 01:06 - Source: CNN Truck explodes after possible propane leak A home security camera caught the moment when a box truck driving through a residential neighborhood exploded in Addison, Illinois. The driver walked away with only minor injuries, CNN affiliate WLS reports. 00:36 - Source: CNN Teens help rescue family from garage fire CNN's Fredricka Whitfield speaks with Aiden Kane and Tyler Sojda, who helped rescue a family in Marcy, New York from a garage fire after spotting the flames while driving home from junior prom. 01:16 - Source: CNN Where Kermit the Frog's tea meme came from Kermit the Frog tells CNN's Sara Sidner his thoughts on being an infamous part of meme culture. 00:41 - Source: CNN Verdict reached in Paris robbery of Kim Kardashian After a weekslong trial, eight people behind the multimillion-dollar armed robbery of Kim Kardashian in Paris were found guilty. Most of them received prison sentences, portions of which were suspended, but all will walk free due to time already served. 00:43 - Source: CNN Anderson catches up with man sailing around the world Anderson Cooper speaks with Oliver Widger for an update on his viral adventures sailing across the world. Widger quit his job, liquidated his 401(k) and bought a sailboat to see the world with his rescue cat, Phoenix. 01:55 - Source: CNN See moment OceanGate team noticed something wrong Newly released video shows OceanGate founder and CEO Stockton Rush's wife, Wendy Rush, who was working on the communications and tracking team, notice the sound of a 'bang' while monitoring the submersible. The Titan submersible imploded on June 18, 2023, killing all five passengers on board. 00:49 - Source: CNN 'The Points Guy' on the best deals for summer travel Brian Kelly, founder of breaks down the best deals for summer travel and how to make the most of your frequent flyer miles. 01:00 - Source: CNN
