What Happened?

Shares of cosmetics company e.l.f. Beauty (NYSE: ELF) fell 6.9% in the afternoon session after the company disclosed new financial details about its recent acquisition of the skincare brand rhode, which appeared to fall short of some investor expectations. In an 8-K filing, e.l.f. Beauty provided historical financial information for rhode, showing annual sales of $212 million for the twelve months ending in March 2025. While analysts calculated the deal would add to e.l.f.'s earnings per share, the sales figures may have disappointed investors who had anticipated stronger direct-to-consumer sales. The market's reaction suggested concerns about the brand's growth momentum, even though the same filing indicated that rhode had strong gross and operating margins.

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What Is The Market Telling Us

e.l.f. Beauty’s shares are extremely volatile and have had 48 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful but not something that would fundamentally change its perception of the business.

The previous big move we wrote about was 10 days ago when the stock dropped 8.2% on the news that investor fears grew over new tariffs on China, which triggered a broad-based market sell-off that hit consumer-focused stocks particularly hard. The downturn was sparked after President Donald Trump threatened “massive” tariffs on China. This news caused major stock indexes to fall, with the S&P 500 dropping 1.8% and the tech-heavy Nasdaq sinking 2.5%. The consumer discretionary sector, which includes companies like e.l.f. Beauty that sell non-essential goods to consumers, was noted as one of the worst-performing groups during the market retreat. The negative sentiment across the market appeared to weigh heavily on the shares.

e.l.f. Beauty is up 4.7% since the beginning of the year, but at $128.77 per share, it is still trading 12.2% below its 52-week high of $146.67 from September 2025. Investors who bought $1,000 worth of e.l.f. Beauty’s shares 5 years ago would now be looking at an investment worth $6,239.

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