Elf Beauty’s $1 billion acquisition of Hailey Bieber’s beauty brand Rhode rocked the industry this year. It also established Elf — once known for its viral dupes and drugstore products starting at $1— as one of the buzziest underdogs in the beauty industry.
Now, Elf Beauty plans to scale to compete with giants like Estée Lauder Companies (ELC), L’Oréal Group and Shiseido. Still, Elf Beauty CEO Tarang Amin, who joined the company in 2014, is quick to clarify: Elf isn’t trying to be them.
“We respect those companies a great deal, but our goal is to create a different kind of beauty company,” Amin says. Rather than replicating the scale-first, globally standardised approach of legacy players, Elf Beauty is focused on building a direct relationship with consumers, developing fast-moving brands and pushing for culture change, he says.
Scaling a beauty group today is a complex challenge. Brands are navigating shifting consumer expectations, inflation pressures, geopolitical risk and a fragmented digital landscape. Shoppers want brands that are culturally fluent, value-led and lightning-fast. Staying competitive requires constant reinvention, and reinvestment in product, marketing and distribution.
Against this backdrop, Elf Beauty has managed to grow steadily. Amin credits that progress to timely execution across social media channels and marketing campaigns, a young and lean team, as well as a portfolio of fast-growing brands. Since 2020, the company has four beauty businesses in its portfolio: Well People, Keys Soulcare, Naturium, and now Rhode. While many big beauty players slowed M&A activity, amid restructuring and economic uncertainty, Elf Beauty bullishly moved ahead with a high-profile deal, signalling its willingness to compete with strategic investors head-on.
Outside of acquisitions, the company continues to focus on core levers — marketing, price accessibility and innovation — to drive results. Elf Beauty’s speed-to-market, cultural fluency and direct consumer engagement have fostered a loyal fan base and significant market momentum. In fiscal 2025, Elf Beauty reported a 28 per cent increase in net sales to $1.3 billion, beating analyst expectations and marking its 25th consecutive growth quarter. “All five brands posted year-on-year gains, with adjusted EBITDA margins staying above 20 per cent,” Amin says. The company first crossed the $1 billion revenue milestone in 2024, marking its position as one of beauty’s fastest-growing players.
Analysts say its consumer responsiveness and pricing strategy are key differentiators. “Elf Beauty is differentiated in the competitive beauty market by leveraging its highly engaged community to inform innovation, marketing and brand-building,” said TD Cowen managing director Oliver Chen in a note to Vogue Business. “It’s known for premium quality at affordable prices, backed by speed that’s unparalleled.” He points to the bestselling Power Grip line, including a primer, a setting spray and other items, as examples of the group’s holy grail franchise strategy, built on viral traction and direct feedback loops. “We expect Elf Beauty to continue delivering disruptive launches rooted in consumer obsession,” Chen added.
The big question then stands: what does a digital-native, founder-led beauty group look like in 2025, and how far can it scale while keeping its edge?
The portfolio play
Elf Beauty’s approach to acquisitions isn’t about racking up logos or chasing scale for scale’s sake. Instead, it’s building a tightly edited portfolio of brands that align with its long-term strategy. “There’s a very good model out there with companies working with 30 or 40 brands, scaling them globally with a machine-like formula,” says Amin. “That’s just not us. We’re much more patient, and we don’t have a cookie-cutter formula. Every brand in our portfolio is complementary for us, distinct, fast growing and brings newness to the industry. So, our vision is really how do we bring out the best of those brands.”
The recent acquisition of Rhode illustrates this approach. The Hailey Bieber-founded brand, known for its minimal packaging and pared-back product line, has shown strong and early traction with Gen Z consumers, posting $212 million in net direct-to-consumer (DTC) sales with only 10 SKUs. While Rhode expands Elf Beauty’s exposure to a more premium consumer base and celebrity-led marketing, Amin says, what also sealed the deal was Bieber’s vision and intentionality. “We don’t just look at numbers. We look at the founder, the whitespace, the potential,” he says.
Naturium, founded by Susan Yara in 2019, checked a different box: clinically effective formulations at accessible price points, rapid growth through Target and DTC, and a gender-inclusive following — 40 per cent of the brand’s global customer base is male, according to Amin. “The products are phenomenal,” he says, “and what Susan built in such a short time told us there was something special there.”
Well People (founded over a decade ago by Shirley Pinkson, James Walker, and Renee Snyder on plant-powered formulas) wasn’t just about expanding the portfolio; it was a strategic capability play. At the time (2020), Elf Beauty was already vegan and cruelty-free (certified by Peta and Leaping Bunny), but Amin says there was growing recognition internally that clean and sustainable formulation standards would become more important to their core Gen Z consumer base. “They were doing clean before it was cool,” says Amin. That early experience proved useful. Elf adopted many of the brand’s ingredient standards (such as parabens, phthalates, formaldehyde, triclosan, triclocarban, toluene, coal tar, lead, mercury, acrylamide and hydroquinone), using the brand as a framework to expand its own approach.
“The Food and Drug Administration only bans 11 ingredients in the US across cosmetic formulation. We don’t formulate with over 2,500 ingredients [the brand draws from the stricter guidelines like those in the EU Cosmetic Regulation, which bans over 1,000 ingredients]. We never would’ve got there if we hadn’t leveraged the kind of capabilities that we did by bringing Well People on,” says Amin. As a result, they were able to improve the quality and cost of goods over time. “Now, Well People has over 100 EWG-verified products. It’s pregnancy-friendly and has a very distinct ingredient-conscious audience that’s also different from the Elf audience.”
Keys Soulcare, meanwhile, expanded Elf Beauty’s positioning to include wellness through its skincare, bodycare and makeup offering. Its marketing and product language (focused on rituals, affirmations and skincare as a form of self-investment), such as the Firm Belief Peptide Cream, presented online alongside the affirmation, “I am stronger than I know”, helped the group tap into a growing segment of consumers looking for brands that offer more than just utility.
Even Elf Skin, a sub-brand launched in 2020, has evolved as a result of acquisitions. After the Naturium deal, the group integrated the brand’s 40-person team, which Amin says helped surface resource gaps and pushed them to scale internal research and development teams, focused on innovation.
“That learning goes both ways,” he says. “It’s never a one-way street; every brand we bring in makes us better.”
Still, Elf’s acquisition criteria remain selective. “We’re not interested in top-line growth alone,” says Amin. “We’re a public company. We need to grow the top and bottom line and do it by disrupting in white space.” That means saying no to legacy brands, overly mature players, or anything too widely distributed. “We ask: can we really add value here? Or is it better suited for someone else?” Amin says. The sweet spot? “$100 million to $300 million in revenue — that’s where we can make a meaningful difference.” It’s the kind of number a conglomerate like P&G (where Amin formerly led Pantene’s leap from $50 million to $2 billion) might dismiss as too small. But to Elf, that’s the opening.
So what makes a brand viable for the group’s future roadmap? “We look for profit and long-term growth, a founder with vision, and whitespace in the category,” Amin says. “But most importantly, it has to fit our values: disrupt norms, shape culture and connect communities.” There’s no quota, no category off limits, he notes, “It’s not about ticking boxes. It’s about fit and future potential.”
Operational differences
Comparatively speaking, Elf is fast beauty. New products go from idea to launch in just 26 weeks — dramatically faster than the four-month to two-year cycle that typifies the industry.
Scaling a business that thrives on speed and creativity means accepting risk, says Amin. “We have to be comfortable with failing forward, with challenging ourselves constantly — whether that’s in pricing, speed-to-market, structure or distribution.”
Speed doesn’t shield the company from structural challenges. With around 75 per cent of its production still based in China, Elf Beauty is grappling with growing tariff risks. In fiscal 2025, the company withheld specific 2026 guidance due to a potential $50 million annual hit from 30 per cent US import tariffs on Chinese goods. It prompted a $1 price increase. “Unlike many of our competitors who regularly take price increases, this is a rare move for us,” Amin said on the earnings call. While the price announcement was timed just before Elf Beauty’s high-profile Rhode acquisition, it sparked some backlash online. In response, Amin says, “75 per cent of our products will continue to be priced at $10 or under. It was essential to share our plan with our community in advance to provide context that pricing is one of several levers we are adjusting to respond to the current economic climate.”
Longer term, the company plans to reduce reliance on China-based manufacturing by the end of fiscal 2026, though it is yet to disclose specific targets. It’s also expanding internationally, partly to diversify revenue, but also to lay the groundwork for global scale. In fiscal 2025, Elf Beauty entered the Netherlands and Belgium, and launched into Poland and Germany through a new partnership with retailer Rossmann. These markets join an existing footprint in the US, the UK, Mexico and Canada, supported by key sellers like Walmart, Target and Sephora.
While legacy beauty groups tend to optimise large team structures for scale and efficiency, Elf Beauty has built a model that Amin hopes will remain leaner and tightly nipped, even at scale. That’s what allows the company to launch fast, take creative risks, move into new channels and acquire brands without losing market momentum or its identity, he says. “If other beauty groups want to do what we did,” says Amin, “it always starts with the people and the culture.”
As Elf Beauty grows, Amin remains confident that the group will remain savvy and agile in nature and strategy. “I don’t think there’s another company that talks this way, but we very much live it,” he says. “You see it in how we work. You see that in our culture, and you see it in every brand we bring in.”
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