Will Rhode Acquisition Become ELF's Key Growth Catalyst in FY26?

The Rhode acquisition is quickly becoming one of e.l.f. Beauty Inc.’s ELF most powerful growth catalysts in fiscal 2026, adding meaningful scale and strengthening the company’s multi-brand strategy. In the second quarter of fiscal 2026, Rhode contributed $52 million to net sales and achieved the largest launch in Sephora North America’s history, surpassing the previous record by 2.5X. 

Rhode’s impact is set to expand even further through the remainder of fiscal 2026. Management expects the brand to contribute 22 percentage points to net sales growth in the second half, significantly enhancing the company’s top-line trajectory. 

Rhode is projected to add $200 million in revenues over the eight months following the acquisition and approximately $300 million on a 12-month annualized basis, reflecting an impressive 40% year-over-year growth rate. These trends position Rhode as one of ELF’s strongest engines of incremental growth.

The acquisition also enhances ELF’s international opportunities. Nearly 20% of Rhode’s DTC sales already come from outside the United States, and the latest launches in Sephora U.K. and additional global markets are designed to unlock even greater reach. This complements ELF’s broader international expansion into Poland, Germany and the GCC, allowing the company to scale multiple brands across high-potential regions.

ELF is supporting Rhode’s rapid momentum with elevated brand-building, digital engagement and retailer partnership initiatives. These investments strengthen Rhode’s visibility across both DTC and wholesale channels while maintaining long-term margin accretion. With its record-setting debut, accelerating demand and expanding international footprint, Rhode is well-positioned to become e.l.f. Beauty’s most influential growth catalyst in fiscal 2026.

e.l.f. Beauty’s Price Performance, Valuation & Estimates

ELF, which competes with Nu Skin Enterprises NUS and Coty Inc. COTY, has seen its shares decline 34.5% in the past six months against the industry’s growth of 18.1%. Meanwhile, shares of Nu Skin and Coty have rallied 15.9% and declined 35%, respectively.

e.l.f. Beauty’s forward 12-month price-to-earnings ratio of 22.16 reflects a lower valuation than the industry’s average of 28.20. ELF has a Value Score of D. ELF is trading at a premium to Nu Skin (with a forward 12-month P/E ratio of 6.87) and Coty (7.44).

The Zacks Consensus Estimate for ELF’s fiscal 2026 earnings implies a year-over-year decline of 13.6%, while the same for fiscal 2027 indicates growth of 27.3%. Earnings estimates for fiscal 2026 and 2027 have been southbound by 26 cents and 27 cents per share, respectively, in the past 30 days.

e.l.f. Beauty currently carries a Zacks Rank #5 (Strong Sell).

You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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This article originally published on Zacks Investment Research (zacks.com).

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