Affordable beauty model e.l.f. has unlocked one thing that’s mystified many retailers: how to win over the ever-persnickety Gen Z.
E.l.f.’s system has included low value factors for high-quality gadgets, TikTok-viral dupes of merchandise from costly manufacturers, and well-liked advertising campaigns that handle not to make its youngest viewers cringe. With 28 consecutive quarters of gross sales progress, the technique seems to be working.
Last May, nonetheless, e.l.f. Beauty made a large — and vastly costly — guess on a completely new sort of enterprise. The firm spent $1 billion to purchase rhode, a make-up and skincare model based by Hailey Bieber. It’s the kind of model e.l.f. usually copies.
The acquisition is a massive a part of the plan laid out by e.l.f. CEO Tarang Amin, who’s making an attempt to construct the corporate into a Twenty first-century beauty conglomerate: inclusive, constructed for and by Gen Z, and a creator of developments as a substitute of a follower.
“We want to be a different kind of beauty company,” Amin advised NCS on the firm’s Oakland headquarters. “We’re going to build brands that disrupt norms, shape culture and connect communities.”
But e.l.f. faces a few raspberry-jelly-tinted flags, together with looming tariffs and an administration hostile to even a whiff of DEI efforts. And as gross sales progress round its dupes begins to wane, the corporate’s future as a powerhouse hinges on rhode’s success.
Amin, who was born in Kenya with Indian roots and immigrated to the United States as a youngster, grew to become e.l.f.’s CEO in 2014. He is the center of the corporate’s advertising engine—and in an age when low cost dupes and beauty hacks unfold like wildfire on social media, advertising is simply as essential as creating new merchandise.
He advised NCS he focuses on constructing a tradition of openness and depends on his younger workforce’s experience. He hosts a biweekly city corridor the place his largely Gen Z staffers (dubbed e.l.f.z ) partake in communal respiratory and stretching workouts. Any worker can be part of calls to assessment and check new merchandise, and thus far, there hasn’t been a leak.
“Some people who came to us from bigger companies were shocked. They’re like, ‘My God, these are your nuclear codes,’” Amin mentioned. But he’s no make-up fanatic, so “I absolutely rely on our young, passionate workforce to have a pulse on what consumers want.”
In the early days of his tenure at e.l.f., Amin’s CMO advised him the corporate wanted to get on TikTok as a result of that’s the place Gen Z was. “And my response is, ‘Well, if that’s where Gen Z, is, absolutely. Now, what’s TikTok?’” Amin mentioned.
The firm has modified a lot since then. In 2019, the corporate reshaped its complete enterprise. It shuttered its 22 brick-and-mortar stores and put that cash into advertising, and it solidified relationships with mega-retailers like Target and Walmart.
The firm’s dupes additionally gained traction on-line round this time. E.l.f. launched a lengthy checklist of merchandise that shortly went viral as “holy grails” in tandem with the rise of TikTok, together with its $11 Poreless Putty Primer (the Tatcha counterpoint retails for $55) and $14 Halo Glow Liquid Filter (in contrast to Charlotte Tilbury’s $50 Hollywood Flawless Filter).
The dupes, combined with intelligent advertising campaigns, sparked success amongst Gen Z shoppers: “We sometimes say we’re an entertainment company that happens to sell beauty products,” Amin mentioned.
Virality is what rhode and e.l.f. have most in frequent, and it’s a essential ingredient in creating a trendy beauty big.
Rhode was an immediate smash when Bieber launched the model in 2022, shortly hovering to $212 million in web gross sales in its final fiscal 12 months with not more than 10 merchandise. The viral craze for merchandise like rhode’s Glazing Milk facial essence—in addition to an urge for food for Bieber’s personal persona—spurred followers to camp out in a single day for pop-up occasions.
People are “buying into the entire brand, the entire lifestyle and products,” Amin mentioned.
That’s why Amin believes e.l.f. can grow to be successful both in Dollar General and Sephora, the place rhode just lately launched. Amin mentioned e.l.f. is taking a look at a checklist of 120 completely different manufacturers for a potential acquisition, a signal that his imaginative and prescient for e.l.f. goes past the core enterprise of holy grail dupes.
Still, rhode is kind of a completely different sort of acquisition for e.l.f., which has beforehand acquired skincare and clear beauty manufacturers Naturium, Keys Soulcare and Well People.
Notably, rhode is priced at an “affordable luxury” level: beginning at $20 for lip remedies, $32 for the Glazing Milk, and up to $38 for a Caffeine Reset sculpting cream masks.
It’s essential that rhode pays off for e.l.f., actually. Rhode contributed $128 million to the corporate’s third-quarter gross sales progress, and it has elevated its expectations to rake in $265 million in web gross sales this 12 months, up to 70% progress. E.l.f.’s authentic beauty model, in the meantime, grew solely 2% within the third quarter of 2026.
Political pressures and doubling down on variety
Last August, e.l.f. raised its prices by $1 in a response to the Trump administration’s tariffs. (Three quarters of its merchandise nonetheless price $10 or much less.) At the time, about 75% of e.l.f. merchandise had been made in China, which is on the heart of President Donald Trump’s chaotic commerce battle.
The firm made a level to clarify the tariff-fueled improve in messages posted throughout social media — a stark distinction to different US retailers that relied on shrinkflation and quiet value bumps. It got here at a time when the White House went after firm leaders who had been open about tariff prices.
“Consumers are smart,” Amin mentioned. “If you try to put some other reason to it, some other twist, it actually gets in the way of that genuine dialogue we have with our community.”
Meanwhile, e.l.f.’s workforce is one thing of a political assertion. After Trump targeted DEI programs in both public and private sectors, many corporations publicly pulled again from these initiatives.
But Amin has doubled down. He says e.l.f.z are 76% ladies, 74% are Gen Z or millennials, and 44% come from various backgrounds. (He additionally grants fairness to each worker, giving them a stake within the recreation.)
And true to the e.l.f. means, the DEI guarantees got here with a cheeky advert marketing campaign. In 2024, e.l.f. rolled out a “Soooo Many Dicks” marketing campaign, pointing on the market are extra males named Richard, Rich and Rick on US public company boards than complete teams of underrepresented ladies. The billboards ran primarily throughout Wall Street sizzling spots, equivalent to The Oculus in New York City’s monetary district.
“In fact, what would be riskier is us abandoning what we stand for,” Amin mentioned. “Our community would know about it right away. And they would hold us accountable for it.”
NCS’s Clare Duffy contributed reporting.