Core Viewpoint - e.l.f. Beauty has experienced a significant stock price increase following strong earnings results and the announcement of an acquisition, indicating positive market sentiment and growth potential for the company [1][11]. Financial Performance - e.l.f. reported a net sales growth of 28% for fiscal 2025 Q4, outperforming the consumer staples sector's growth of 4% and analysts' forecast of less than 2% [2]. - The adjusted diluted earnings per share (EPS) increased by 47% to $0.78, surpassing expectations of approximately 36% growth [3]. - The adjusted EBITDA margin nearly doubled from 12.7% in fiscal Q4 2024 to 24.5% in fiscal Q4 2025 [2]. Tariff Impact - The company highlighted significant exposure to tariff risks, particularly as 75% of its global production is sourced from China, which is currently subject to 55% tariffs [4]. - If tariffs remain at current levels, e.l.f. estimates an annual increase of $50 million in its cost of goods sold, which would reduce its adjusted gross margin from 71.2% to 67.4% [5]. - The company plans to increase prices across all products by $1 starting August 1 to mitigate tariff impacts [6]. Acquisition of Rhode - e.l.f. announced the acquisition of Rhode, a fast-growing beauty brand, for a total potential price of $1 billion, with $800 million paid upfront and $200 million contingent on growth targets [9]. - Rhode achieved $212 million in net sales over the last 12 months, contributing to e.l.f.'s growth strategy [7]. - The acquisition is expected to be moderately dilutive to existing shareholders, increasing the company's issued share count by approximately 4.7% and nearly tripling its total debt from $305 million [10]. Analyst Sentiment - Analysts at Bank of America have raised their price target for e.l.f. to $113, citing the positive contributions expected from the Rhode acquisition to e.l.f.'s gross margin, EBITDA margin, and earnings [11].