Description

e.l.f. Beauty’s Rhode Bet Changes the Growth Equation — Execution Upside or Integration Risk?

e.l.f. Beauty delivered a third quarter characterized by strong reported growth alongside a clear divergence between acquired and organic performance, providing a mixed but informative picture of the company’s underlying trajectory. Reported net sales increased 38% year over year, driven primarily by the contribution from the rhode acquisition, which added approximately $128 million during the quarter and materially exceeded initial expectations. Adjusted EBITDA rose 79%, reflecting scale benefits, marketing leverage year over year, and the high-margin profile of the acquired brand, partially offset by tariff-related cost pressure. Excluding rhode, organic net sales grew approximately 2%, below prior expectations. Management attributed this to softer consumption trends in certain international markets, particularly the U.K. and Germany, as well as pipeline effects as the company cycled significant retail expansion from the prior year.