How E.l.f pulled off its $1 billion Rhode deal

Core Insights - E.l.f. Beauty experienced a 30% decline in net income in its first fiscal quarter following the announcement of President Trump's tariffs, leading to an 11% drop in share price after the earnings report [1] - Despite the short-term challenges, the CEO emphasized the company's 26 consecutive quarters of net sales growth and ongoing international and retail expansions, including a $1 billion acquisition of Hailey Bieber's skincare brand, Rhode [2][5] - E.l.f. has gained popularity through social media marketing, particularly on platforms like TikTok and Roblox, and is recognized as the top color cosmetics brand in the U.S. by units sold [3][4] Financial Performance - The company celebrated its first billion-dollar fiscal quarter in May 2024, with a 77% sales spike, although net sales growth has slowed in subsequent quarters [5] - The acquisition of Rhode, which generated $212 million in net sales within three years, will enhance E.l.f.'s presence in Sephora stores in the U.S. this fall, financed by $600 million in debt [5] Market Position - E.l.f. is positioned as a challenger to established brands like Estée Lauder and L'Oréal, and is particularly favored by Gen Z, Gen Alpha, and millennial consumers [4] - Analysts express cautious optimism regarding the company's growth potential, suggesting it could become the number one mass cosmetics company globally over time [4]