Rhode contributes $160 million as core e.l.f. brand sales decline

E.l.f. Beauty reported fiscal first-quarter sales of $479.4 million, a 36% increase from a year earlier that exceeded Wall Street’s projection of $431.2 million. Quarterly profit doubled to $66.6 million, or $1.12 a share, from $33.3 million, or 58 cents a share, a year earlier. Adjusted earnings per share were $1.75, compared with analyst estimates of 71 cents, according to FactSet. Tariff refunds boosted quarterly earnings per share by about 68 cents.

The company raised its full-year sales forecast to $1.94 billion to $1.97 billion, up from its initial projection of $1.84 billion to $1.87 billion. E.l.f. also lifted its adjusted earnings per share guidance to $3.50 to $3.55, up from $3.27 to $3.32. Both updated ranges exceed Wall Street estimates.

Rhode, the skincare and cosmetics brand founded by Hailey Bieber that e.l.f. acquired for $1 billion a year ago, contributed about $160 million in sales during the quarter. Chief Financial Officer Mandy Fields said the brand’s performance exceeded the company’s expectations.

Fields said Rhode has resonated with Gen Z and younger millennials, though she said its appeal extends more broadly, with consumers across the board looking to Bieber to inform their beauty routines. “Everybody looks at her and aspires to do what she’s doing,” Fields said. “I think there are women in their 40s that are lining up to get Rhode products as well.”

Fields said Rhode pursues a limited product range, aiming to make “one of everything really good,” which she said has led to broad growth across each of its categories. “They’ve had a curated set of items that they’ve gone after, so whether that be in blushes or in lips or in highlighter or bronzing categories, they’re seeing strength across the board,” she said.

Given Rhode’s outperformance relative to an earnout threshold in its merger agreement, e.l.f. recorded a fair value adjustment of $16.1 million during the quarter.

Sales for the core e.l.f. brand declined during the quarter. Fields attributed the decline to the company lapping a busy shipping period from a year earlier, an enterprise resource planning system transition, and the prior year’s lip balm launch. She said trends for the e.l.f. brand have started to improve recently, and the company expects growth across each of its brands over the balance of the year.