E.l.f. Beauty Shares Plunge as Sales Fall Short

E.l.f. Beauty Shares Drop After Sales Forecast Miss

E.l.f. Beauty experienced a 29 percent plunge in shares following a sales forecast that fell below market expectations, despite strong demand for Rhode. The company reported 14 percent growth in its latest quarter, driven by Rhode's performance.

Impact of Rhode Acquisition

This was E.l.f. Beauty’s first earnings report since acquiring Rhode, the brand founded by Hailey Bieber. The company projected that Rhode would grow by 40 percent in 2025 and contribute $200 million to combined sales during the current fiscal year.

However, Rhode’s growth was insufficient to compensate for a slowdown in E.l.f.’s overall sales. The company’s second-quarter sales of $344 million increased by 14 percent but did not meet expectations. The full-year sales forecast of $1.57 billion, representing growth of 18 to 20 percent, was also below the analyst average of $1.65 billion.

Sephora Launch Success

"Rhode’s Sephora launch on Sept. 4 was by far the biggest launch Sephora North America has ever seen," said Tarang Amin, E.l.f. Beauty chief executive, to The Business of Beauty.

The launch more than doubled the initial sales of the previous record holder. According to TD Cowen research, Rhode generated $15 million in sales during its first two days at Sephora.

Sales Performance and Forecast

Before the Sephora launch, SEC filings showed Rhode had $40 million in quarterly sales through June 30, indicating a slowdown in growth. Despite this, the company expects Rhode’s sales to increase by 40 percent to $300 million in the calendar year.

Summary

E.l.f. Beauty’s shares dropped sharply due to a cautious sales forecast despite strong momentum from Rhode's Sephora debut and projected growth.

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The Business of Fashion The Business of Fashion — 2025-11-06

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