e.l.f. Beauty's Q4 2025: Unraveling Contradictions on Innovation, Acquisitions, and Tariff Strategies

Innovation performance and market share growth, rhode acquisition strategy, tariff mitigation strategy and impact, pricing strategy and impact of tariffs, international growth and market expansion are the key contradictions discussed in e.l.f. Beauty's latest 2025Q4 earnings call.



Record Financial Performance and Market Share Growth:
- e.l.f. Beauty reported a 28% increase in net sales and a 26% increase in adjusted EBITDA for fiscal 2025, marking the 25th consecutive quarter of net sales growth and market share gains.
- This growth was driven by the company's value proposition, disruptive marketing, and powerhouse innovation, particularly in the U.S. with a 190 basis points increase in market share.

Tariff Mitigation and Pricing Strategy:
- The company is likely to face a $50 million annualized gross impact on cost of goods sold due to tariffs.
- To mitigate this, e.l.f. Beauty plans a $1 price increase across its product assortment globally, effective August 1, while also optimizing its supply chain and exploring business diversification opportunities.

International Expansion and Sales Diversification:
- International sales contributed 60% growth in fiscal 2025, with notable launches in Rossmann Germany and expansion into new markets like Belgium and Poland.
- This diversification is part of the company's strategy to reduce reliance on U.S. sales and leverage international demand for its brands.

Acquisition of rhode and Strategic Mergers:
- e.l.f. Beauty announced a definitive agreement to acquire rhode, a fast-growing lifestyle-based beauty brand with $212 million in net sales in the last 12 months.
- The acquisition aims to leverage rhode's unique engagement model and strong brand equity, enhancing e.l.f.'s global presence with key retailers such as Sephora.