Hailey Bieber’s rhode misses sales targets after e.l.f. Beauty acquisition as shares slip 7%

Shares of e.l.f. Beauty (NYSE:ELF) declined on Monday after the company reported weaker-than-expected sales from its newest acquisition, Hailey Bieber’s skincare brand rhode.

According to a recent filing with the US Securities and Exchange Commission, rhode generated $40.2 million in sales for the three months ending June 30, 2025.

The figure came in below market expectations and weighed on investor sentiment. Despite this, rhode recorded healthy gross and operating margins, both of which are expected to strengthen e.l.f. Beauty’s profitability for the 2025 financial year.

The sales update followed e.l.f. Beauty’s $1 billion acquisition of rhode, a deal announced earlier this year that had been expected to boost earnings by approximately $0.38 per share for FY25. However, due to softer revenue performance and ongoing tariff uncertainty, analysts now believe the financial uplift may be smaller than initially forecast.

At the time of the acquisition, e.l.f. Beauty CEO Tarang Amin expressed optimism about the brand’s future, stating, “It’s a very fast-growing brand… and we have very high hopes as [rhode] expands into Sephora as well.” 

Hailey Bieber has also spoken about the acquisition, revealing in an interview with WSJ. Magazine that she plans to save her share of the sale proceeds for her family’s future. “I want to preserve that for my son’s future,” she said. “It’s an amount of money that I have not dealt with before, so I just want to be smart with it.”

Bieber, who shares 14-month-old Jack Blues Bieber with husband Justin Bieber, added that she intends to invest the profits wisely and continue her role as Chief Creative Officer and Head of Innovation at rhode.

E.l.f. Beauty shares closed down 7% on Monday, ending a three-day winning streak.