E.l.f. Beauty (ELF) , which owns makeup and skin care brands such as E.l.f. Cosmetics, Rhode, and SKIN, appears to be benefiting from a growing consumer trend.
Recently, cosmetic purchases have been on the rise, especially among Gen Z consumers.
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According to a recent survey from investment bank Piper Sandler, Gen Z shoppers in the U.S. are spending $374 annually on beauty, which is 10% more than what they spent last year. Also, E.l.f. Cosmetics is the No. 1 cosmetics brand among this group of shoppers.
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The increased consumer momentum appears to be translating into E.l.f. Beauty’s sales. In its second-quarter earnings report for 2025, the company revealed that its net sales increased by 9% year-over-year.
However, E.l.f. Beauty’s operating income, the company’s profit after expenses, declined by almost 4%.
E.l.f saw an increase in sales during the second quarter of 2025.
Image source: E.l.f. Beauty
E.l.f. Beauty CEO doubles down on a drastic move, impacting shoppers
Amid increasing sales, E.l.f. Beauty, like many retailers nationwide, is battling the growing threat of President Donald Trump’s tariffs on multiple countries, which are expected to result in higher prices for everyday goods.
During an earnings call on Aug. 7, E.l.f. Beauty CEO Tarang Amin defended the company’s recent decision to raise its prices by $1 across all products to mitigate the impact of tariffs. The change took effect on Aug. 1, the third price increase in the company’s 21-year history.
“With these increases just going in on Aug. 1, we’re still reading how the consumer will respond to that,” said Amin. “It will take a couple weeks for that to fully roll out within retail, and so that is something that we’re watching for.”
He acknowledged that consumers are being “choiceful” about their spending amid recent economic concerns, but emphasized that the company is still offering shoppers value.
Related: Ulta Beauty issues stern warning as consumers switch gears
“I think from our perspective, the great thing is even with this price increase, 75% of our portfolio will be at $10 or below,” said Amin. “So still very much a value for our community, and we’re feeling great about that.”
He also said that E.l.f. Beauty, which sells its products in large retail store chains such as Ulta Beauty, Sephora, Target, and Walmart, is gaining “acceptance” from the retailers it works with over its decision to raise prices.
Amin also highlighted that other brands are making similar decisions to combat increased costs associated with tariffs.
“We are hearing of a number of brands that are gonna be taking pricing,” said Amin. “So I think we (are) in that environment right now with the uncertainty of tariffs and the tariff impact that you will probably see more companies take pricing.”
E.l.f. Beauty’s price increase could have harsh consequences
The move from E.l.f. Beauty could have a notable impact on its sales as consumers are already concerned about tariffs impacting their finances.
According to recent data from CivicScience, nearly 3 in 10 shoppers (29%) are likely to scale back spending on beauty products if tariffs raise prices.
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As E.l.f. Beauty pulls a risky lever, it is doubling down on innovation to attract more customers. The company is specifically focused on further developing viral skin care brand Rhode, founded by model Hailey Bieber, after it acquired it for $1 billion in May.
“As we combine, our initial focus will be to help in two areas: first, to accelerate Rhode’s brand awareness,” said Amin. “For context, Rhode’s aided awareness is 20% today in the U.S., half the level of other premium skincare brands, which average 40% or more awareness. Second, we plan to leverage our deep retail expertise and help Rhode expand their distribution footprint. The team is focused on executing its launch with Sephora, the world’s leading global beauty retailer.”
Rhode is set to launch in Sephora stores in the U.S. and Canada in September, and in the UK by the end of the year.
“As we look ahead, and now further fueled by Rhode, we see an opportunity to more than double our business over the coming years, with significant white space we see in color cosmetics, skin care, and international across our portfolio of brands,” said Amin.
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