E.l.f. Beauty CEO rejects growth fears, points to 'great momentum' following Hailey Bieber deal
Hailey Bieber is currently the million-dollar tailwind in e.l.f. Beauty's (ELF) sails — and CEO Tarang Amin is betting that's strong enough to blow away Wall Street's skepticism.
"I've never seen a brand that's gone from $0 to $212 million in net sales in less than three years," Amin told Yahoo Finance's Opening Bid, referring to the company's recent acquisition of Bieber's skin care line, Rhode.
Consumers are "willing to wait for one of their [Rhode's] pop events 14 hours overnight," Amin said, noting that shoppers were essentially "buying into the entire lifestyle."
Wall Street, however, isn't convinced. Despite a significant beat in its most recent quarter, e.l.f. Beauty is facing a shifting narrative from the Street. Over the past year, shares of e.l.f. have slipped roughly 8%.
A recent report from JPMorgan analyst Andrea Teixeira highlighted a "concerning" deceleration in core business growth, noting that while the top-line numbers are surging, they are heavily propped up by the Rhode acquisition. Organic growth in the base business is expected to slow to just 2% in the back half of this year.
Amin isn't buying the bear case. Speaking on the disparity between shipment numbers and actual consumer demand, he dismissed the idea of a slowdown as a "pipeline" accounting quirk rather than a drop in popularity.
The bull case rests on two pillars: a celebrity-fueled high end and the inflation-weary low end. On the high end, Rhode gives e.l.f. a foothold in the prestige "lifestyle" category. With millions of followers on Instagram and TikTok, Bieber's brand has achieved massive scale through a tight lineup of just 10 products.
On the other end of the spectrum, e.l.f. is leaning into its footprint in 11,000 Dollar General (DG) stores. While other consumer staple giants like PepsiCo (PEP) are sounding alarms about the "under pressure" low-income shopper, Amin claims e.l.f. is thriving in the value aisle. He noted that 60% of people who buy e.l.f. products at Dollar General are entirely new to buying cosmetics at the discount retailer.
"We continue to see great momentum," he said. "So I think this ability for us to bring the best of beauty with our incredible values really resonates across really all income groups."
The skepticism from analysts may stem from one lingering question: Can e.l.f. maintain its 28-quarter growth streak when the organic engine is cooling?
Amin remains confident, thanks in part to a loyal roster of Gen Z and millennial consumers. "I don't see anything that would change that," he said.
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