Shares of e.l.f. Beauty (NYSE: ELF) surged 24% in Thursday morning trading following a blockbuster announcement that the cosmetics brand has agreed to acquire Rhode, the skincare company founded by model and influencer Hailey Bieber. The deal, valued at up to $1 billion, marks one of the most high-profile acquisitions in the beauty industry this year.
Under the terms of the agreement, e.l.f. will pay $800 million at closing — $600 million in cash and $200 million in newly issued e.l.f. common stock, equivalent to approximately 2.6 million shares. The deal also includes a performance-based earnout of up to $200 million tied to Rhode’s results through 2028.
The acquisition values Rhode at 3.8 times its last 12 months (LTM) net sales of $212 million, as of March 31, 2025. Rhode has been a breakout success in the skincare space, doubling its customer base over the past year and generating impressive growth, making it a strategic complement to e.l.f. Beauty’s expanding portfolio.
Investor enthusiasm was further fueled by a strong quarterly earnings report from e.l.f. Beauty. The company reported adjusted earnings of $0.78 per share for the March 2025 quarter, beating the Zacks Consensus Estimate of $0.73. This represents a 47% increase compared to earnings of $0.53 per share in the same period last year and reflects a surprise beat of 6.85%.
Quarterly revenue also came in strong at $332.65 million, up from $321.14 million a year ago and ahead of the consensus estimate by nearly 2%. e.l.f. has now exceeded revenue expectations in each of the last four quarters, highlighting its consistent performance and resilience in a competitive market.
The Rhode acquisition signals e.l.f. Beauty’s ambition to deepen its presence in the skincare segment and capitalize on Rhode’s strong brand recognition and loyal Gen Z following. Market watchers say the move positions e.l.f. to better compete with luxury and celebrity-driven brands in a fast-evolving beauty landscape.
With solid earnings momentum and a bold strategic move in its pipeline, e.l.f. Beauty is riding high — and Wall Street has taken notice.
