E.l.f. Beauty Shares Plunge as Sales Fall Short
Despite robust demand for Rhode driving a 14 percent revenue increase in the latest quarter, E.l.f. Beauty’s shares dropped by up to 29 percent after forecasts fell short of expectations.
Quarterly and Annual Forecasts
The company, in its first earnings report since acquiring Rhode, projected that the Hailey Bieber-founded brand would grow by 40 percent in 2025, contributing an additional $200 million in sales to its current fiscal year. However, this momentum failed to compensate for the slowing growth within E.l.f.’s core business.
Second-quarter sales reached $344 million, up 14 percent, but below analyst expectations. The company’s full-year growth forecast of 18 to 20 percent, or approximately $1.57 billion in sales, also fell short of the $1.65 billion average forecast by analysts.
Rhode’s Performance and Market Impact
“Rhode’s Sephora launch on Sept. 4 was by far the biggest launch Sephora North America has ever seen,” said Tarang Amin, CEO of E.l.f. Beauty. “It more than doubled the initial sales of the previous record holder.”
According to TD Cowen, Rhode achieved $15 million in sales in just its first two days at Sephora. Prior to its retail launch, filings with the SEC indicated the brand had generated $40 million in quarterly sales through June 30, reflecting a modest slowdown.
Outlook
E.l.f. expects Rhode to expand 40 percent in calendar year 2025, reaching $300 million in sales. Yet, analysts remain cautious about whether this will be sufficient to counterbalance weaker performance across E.l.f.’s established lines.
Author’s summary: E.l.f. Beauty’s shares tumbled after its sales guidance fell short, despite standout results from Rhode’s record-breaking debut at Sephora.