What Happened?
Shares of cosmetics company e.l.f. Beauty (NYSE: ELF) jumped 24% in the afternoon session after the company reported impressive first quarter 2025 (fiscal Q4) results which blew past analysts' sales, earnings, and operating profit estimates.
What really stood out was the acquisition of Hailey Bieber's skincare brand, Rhode, for $1 billion (in cash and stock), adding a fast-growing, culturally resonant brand to the portfolio. At the time of the acquisition, Rhode had $212 million in net sales, generated directly from consumers, with only 10 products, and had demonstrated exceptional consumer traction, particularly among social media-driven audiences on platforms like TikTok.
On the other hand, ELF pulled its full-year guidance due to tariff uncertainty. Overall, we think this was a good quarter.
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What The Market Is Telling Us
e.l.f. Beauty’s shares are extremely volatile and have had 51 moves greater than 5% over the last year. But moves this big are rare even for e.l.f. Beauty and indicate this news significantly impacted the market’s perception of the business.
The previous big move we wrote about was 2 days ago when the stock gained 6.2% on the news that the major indices rebounded (Nasdaq +2.0%, S&P 500 +1.5%) as President Trump postponed the planned 50% tariff on European Union imports, shifting the start date to July 9, 2025. Companies with substantial business ties to Europe likely had some relief as the delay reduced near-term cost pressures and preserved cross-border demand.
e.l.f. Beauty is down 9.1% since the beginning of the year, and at $111.80 per share, it is trading 48.7% below its 52-week high of $218 from June 2024. Investors who bought $1,000 worth of e.l.f. Beauty’s shares 5 years ago would now be looking at an investment worth $6,523.
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