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Elf Beauty announced plans to acquire Hailey Bieber's beauty brand Rhode. It's an a deal worth up to a billion dollars as the makeup company looks to expand further into skincare. It's Elf's biggest deal ever and it's expected to close later this year. We're joined now by Mandy Fields, Chief Financial Officer of the cosmetics firm. Mandy, thank you so much for being here. Obviously you guys are causing some waves with this buy that you guys made. Um, so now with this acquisition, once it closes, you'll have the elf brand, you'll have Naturium, which is another skin care brand that you all bought, and you'll have Rhode. So talk to me about how Rhode fits into the portfolio and what your plans are for it.

Well, thank you so much for having me. And we are very excited to welcome Rhode into the Elf Beauty portfolio of brands. We found a like-minded disruptor and Rhode, and she what Haley has built is really connected to community, which is also very important to us. And so we see this as a great fit in our portfolio and aligns with our vision of building a different kind of beauty company.

And so, what will, you know, I know that there was a lot of talk on the call about Rhode's already, its plans already in place to expand into Sephora, for example. Um, are you looking for other sales channels? It's also a limited brand in terms of the number of products, although it's grown very quickly. It only has 10 products. So, are you planning to expand the brand beyond those products and in more sales locations?

Well, the brand is very impressive. It's gone from zero to 212 million in net sales in three years on, as you said, 10 products overall, only online. And so this expansion into Sephora is very exciting. And with our retail expertise, um, we are very much looking forward to that.

Um, and you know, when you look at now the the company that you all are building, um, and I think of a lot of legacy beauty companies that have a lot of brands underneath them, is that what Elf is now trying to build? And if so, what is that sort of umbrella identity, if you will, of Elf?

Yes, we have a vision of building a different kind of beauty company or really a different kind of company period. Really built on the notion of disrupting norms, shaping culture and connecting communities. And all of our brands have that unifying thread. So there's not a number of brands that we have as an objective to have in our portfolio. It's really about those that disrupt norms and connect communities. That's most important.

Are you all actively looking at other brands that fit that profile to to add to Elf?

You know, we see a lot of things come through, but we have been very disciplined in fact on the M&A front. You mentioned Naturium that we acquired back in 2023. Well, people, we acquired earlier on as well. And so, um, we've been very disciplined on that front. And so not proactively looking, uh, but again, if we found something that kind of hit the mark, welcome to the portfolio.

Gotcha. Um, I want to talk about tariffs and the price increase that you all just announced of a dollar across the board on your products. Um, what have you been hearing? I know you all have a very active conversation with your customers, um, perhaps more active than some other beauty brands. What have you been hearing from your customers, um, in reaction to that price increase?

So you're right, we announced our price increase last Friday. And when we say announced, we announced that on our social media channels to our community because that's who we want to be most transparent with. Uh, our pricing will actually not go into effect until August 1st. And so our community has been very, uh, positive on this on this notion of having to raise price. We're only doing it by a dollar. And again, we've been transparent with our community, giving them a bit of a heads up before it goes into effect in August.

Um, and as you noted on the call, you all are not giving a forecast for the full year because the tariff outlook is so uncertain here. So if the some of the tariffs get rolled back and and I know 75% of your manufacturing happens in China, um, if some of the tariffs get rolled back, will the price increase roll back as well, or is that something you're putting in place now and it's sort of indefinite?

Well, there's just such a range of outcomes from a tariff perspective. Um, this is part this is the main driver why we did not provide guidance. Um, you I saw the segment right before it was about tariffs once again. And so until we have more certainty on the tariff front, um, we won't be providing guidance and I would say pricing is one lever that we have in our toolkit, but we're also looking at our supply chain to optimize that and also looking at business diversification as we think about tariff mitigation.

Um, I was also struck by, um, the international growth that you all are seeing, international sales up by 60%. Um, net sales in the US by contrast, up only 1%. Um, what do you expect to be that sort of cadence going forward?

Well, we're very pleased with what we're seeing from a sales growth standpoint. In fact, Q4 marked our 25th consecutive quarter of net sales growth and market share gains. And we're really the only beauty company to have grown market share for 25 consecutive quarters. And so we're very proud of the results that we've delivered. Our fiscal 25, which which we just reported yesterday, up 28%. So very strong results and very proud of the team.

Uh, Mandy, thank you so much for your time. Appreciate it.

Thank you so much for having me.

Take care.