"From Viral Lip Balm to Stock Recovery: How Hailey Bieber Helped e.l.f. Beauty Bounce Back in 4 Months [Business & Issue]"

Halved by the Tariff War, Then Rebounding After Negotiations... A Rollercoaster Stock Price
Optimism on Wall Street... "The Impact of the Rhode Acquisition Is Underestimated"

Pop singer Justin Bieber's wife and model Hailey Bieber. Seen carrying the skincare brand 'Lorde' lip balm on her belt and phone case. Social media promotional image. Photo by Hailey Bieber SNS.

The share price of e.l.f. Beauty, a value-for-money cosmetics brand popular among American teenagers, is recovering to its previous levels just four months after it was halved due to the impact of the U.S.-China tariff war. The recovery was driven by two key factors: the United States extended its tariff deferral on China by another 90 days, and e.l.f. Beauty successfully acquired "Rhode," the skincare brand created by Hailey Bieber, wife of pop singer Justin Bieber and a model, thereby expanding its consumer reach.

Halved by the Tariff War, Rebound After Negotiations Begin... Rollercoaster Share Price

On August 12 (local time), e.l.f. Beauty shares closed at $116.75 on the U.S. Nasdaq, up 4.55% from the previous session. After plunging to a yearly low of $49.95 on April 16, the share price has surged 133% in four months, now approaching the year's opening price of $122.99. The rally continues after President Donald Trump signed an executive order on August 11 extending the tariff deferral on China by an additional 90 days, fueling investor relief.

Elf Beauty homepage

The reason the share price had previously been halved is that 75% of e.l.f. Beauty's cosmetics are produced in Chinese factories, making the company highly susceptible to the effects of the U.S.-China tariff war. Despite a 9% year-on-year increase in sales for the April to June period this year, e.l.f. Beauty's net profit fell by 30% to $33.3 million (approximately 46.1 billion KRW). The company stated, "Tariffs of up to 55% are being imposed on products made in China," and added, "Due to the significant impact of tariffs, we will not be providing annual sales guidance."

Since August 1, e.l.f. Beauty has responded to the tariff war by raising prices by $1 across all its products. CEO Tarang Amin told CNBC, "Even after the price increase, over 75% of our products are still priced under $10, and consumer response has been positive."

Optimism on Wall Street... "Rhode Acquisition Effect Underestimated"

Hailey Bieber, pop singer Justin Bieber's wife and a model. Promotional image for the skincare brand 'Rhode' on social media. Hailey Bieber's social media.

There is also growing consensus that the acquisition of the skincare brand Rhode for $1 billion (approximately 1.3845 trillion KRW) in May could yield significant benefits for e.l.f. Beauty. Since its launch in 2022, Rhode has rapidly grown into a major cosmetics brand, fueled by Hailey's popularity. Last year, Rhode posted net sales of $212 million (approximately 293.5 billion KRW). With Rhode under its wing, e.l.f. Beauty has secured a presence in Sephora, the world's largest cosmetics retailer. Hailey also remains as Rhode's Chief Creative Officer (CCO), continuing to promote the brand on social media.

In 2022, Hailey Bieber appeared as the advertising model for the cosmetics brand "Rhode." Rhode, created by Hailey, was sold to e.l.f. Beauty in May for $1 billion (approximately 1.3845 trillion KRW). Hailey remains as the Chief Creative Officer (CCO) of e.l.f. Beauty and continues to promote Rhode. Rhode official website

On August 11, Morgan Stanley upgraded its investment rating for e.l.f. Beauty from "neutral" to "overweight" and raised its target price from $114 to $134. The firm noted that the profits expected from the recent Rhode acquisition are being underestimated, and projected that net income will increase from the second quarter onward if the U.S.-China tariff war eases.

Deutsche Bank also recently upgraded its investment rating for e.l.f. Beauty from "hold" to "buy" while maintaining its target price at $121. Deutsche Bank pointed out, "Given that e.l.f. Beauty's long-term outlook remains unchanged, concerns about sales and profit declines due to recent tariff issues are excessive." Bank of America (BOA) likewise maintained its existing "buy" rating and target price of $135.

John Tennent, Managing Director at investment firm Baird, told CNBC, "Profits from e.l.f. Beauty's acquisition of Rhode and its entry into Sephora will likely exceed expectations," adding, "From a profitability standpoint, we should continue to watch how e.l.f. Beauty addresses the challenges posed by the tariff issue."