Hailey Bieber’s Rhode is making serious money, helping its parent company grow against the market and adding another HK$450 million to the acquisition price

Key Takeaways

• e.l.f. Beauty’s full-year sales surpassed US$ 1.64 billion, marking seven consecutive years of growth.
• Over the past year, Rhode quietly contributed an impressive US$ 390 million in sales.
• After Rhode exceeded its first-year performance targets, its parent company must pay an additional US$ 57.6 million earn-out.
• The combination of high-end aesthetics and a strong production network has helped the group break into the premium market.

e.l.f. Beauty, a favorite affordable beauty brand among budget-conscious shoppers, recently released its latest earnings report, with standout results: full-year sales surpassed US$ 1.64 billion (about HK$ 12.8 billion/NT$ 53.3 billion), marking an impressive seven consecutive years of growth. Yet the biggest talking point in the fashion world isn’t its own affordable makeup, but Rhode, the trendy beauty brand founded by Hailey Bieber that it acquired last year. Rhode is making so much money that it has given its parent company a sweet problem: having to put up more cash for the acquisition.

• Related article: Rhode launches its first pimple patches, designed and endorsed by Justin Bieber himself. A husband this devoted is seriously enviable!

 

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Explosive growth: Rhode becomes the group’s strongest growth engine

The newly released figures show that Rhode’s ability to generate revenue has far exceeded everyone’s expectations. Over the past year, Rhode quietly contributed as much as US$ 390 million in sales (about HK$ 3.04 billion/NT$ 12.7 billion), up more than 80% from the previous year. Its total global sales also surpassed US$ 500 million (about HK$ 3.9 billion/NT$ 16.3 billion), a remarkable figure.

The biggest reason behind these explosive results is Rhode’s successful move from online-only sales into physical retail. Previously available only through its official website, where shoppers had to scramble to buy it, Rhode officially entered Sephora stores in Europe and the U.S. at the end of last year. Even more impressive, Rhode is currently carried by only about 20% of Sephora locations, meaning it still has plenty of room to grow. From the Peptide Lip Tint, which sells out within seconds of every restock, to the Pocket Blush, a favorite among beauty influencers in Europe and the U.S., the products have helped the parent company attract more loyal fans seeking a polished feel.

Rhode is making so much money that its parent company is adding another US$ 57.6 million

Because Rhode’s performance has been so strong, the earnings report also reveals an interesting detail: e.l.f. Beauty must pay a “sweet price” by adding an acquisition earn-out of as much as US$ 57.6 million (about HK$ 449 million/NT$ 1.87 billion).

So what exactly is going on? When e.l.f. announced its US$ 1 billion acquisition of Rhode in May 2025, the contract included a performance-based incentive mechanism. e.l.f. paid US$ 800 million upfront, while the remaining US$ 200 million earn-out would be determined by Rhode’s performance during its first three years with the group.

 

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Who could have expected Hailey Bieber’s ability to drive sales to be so off the charts? Rhode had an exceptionally profitable first year and met its incentive targets ahead of schedule. As a result, e.l.f. Beauty is more than willing to pay this additional amount of nearly HK$ 450 million. While it increases the company’s short-term expenses on paper, in the long run, it is clearly a highly successful investment and partnership.

High-end skincare and affordable alternatives join forces

 

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This acquisition makes e.l.f. Beauty’s smart business strategy clear. As competition in the affordable beauty market grows fiercer, e.l.f. decided not to focus solely on offering alternatives to big-name brands. It first acquired the popular skincare brand Naturium, then brought Gen Z favorite Rhode under its wing, successfully transforming the company. Rhode’s signature minimalist yet premium feel, together with Hailey Bieber’s unmatched fashion influence online, has helped its parent company enter the premium beauty market that had previously been out of reach.

Hailey Bieber remains the brand’s chief creative officer, personally overseeing its beautiful product design and buzzworthy marketing. With the parent company’s powerful production network and global Sephora distribution resources, Rhode’s minimalist beauty universe is clearly only beginning to shine. It’s one of the rare superstar-loved brands that feels easy to buy into, so women’s wallets will likely remain hard to hold onto in the coming quarters.

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