e.l.f. Beauty, Inc. (ELF): Business Model Canvas [Dec-2025 Updated]

You're digging into how e.l.f. Beauty, Inc. managed to keep its growth engine roaring through 2025, especially after that big $800.0 million acquisition of rhode. Honestly, the numbers show a masterclass in disruption: they hit $1,313.5 million in net sales for Fiscal Year 2025, a 28% jump, all while keeping 75% of their core products at $10 or less. It's not just about the low prices, though; their model hinges on deep digital ties and strategic retail dominance, like their key partnership with Target, which now gives them over 20% of the cosmetics share. Let's break down the nine blocks of this high-velocity business model so you can see exactly how they're pulling it off.

e.l.f. Beauty, Inc. (ELF) - Canvas Business Model: Key Partnerships

The Key Partnerships for e.l.f. Beauty, Inc. are centered on maintaining its speed-to-market advantage and maximizing accessibility through strategic retail and digital channels.

Major US retailers form the backbone of domestic distribution. At Target, e.l.f. Beauty, Inc. holds a 21% cosmetics share, an increase of 190 basis points in Q1 of fiscal 2026. Target has expressed a desire for e.l.f. Beauty, Inc. to become its first $1 billion beauty brand, up from current retail sales of about $0.5 billion at that retailer. The support from Target included expanding the brand's space from 13 feet to 20 feet. Also crucial is the relationship with Ulta Beauty, which is expanding space for e.l.f. Beauty, Inc. this spring (of 2025), where it is considered one of their top brands. Shelf space is also being picked up at Walmart.

Global retail expansion relies on disciplined sequential strategy with leading partners. This includes launching in 1,600 Rossmann stores in Germany and expanding into Rossmann in Poland. Furthermore, e.l.f. Beauty, Inc. is entering the Gulf Cooperation Council (GCC) region, which includes Bahrain, Kuwait, Oman, Qatar, Saudi Arabia, and the UAE, through partner Sephora. International net sales climbed 30% year-over-year in fiscal Q1 2026, accounting for 20% of total sales. In fiscal 2025, total net sales reached $1.313 billion.

The asset-light, speed-to-market supply chain is heavily reliant on China-based manufacturing suppliers. Favorable foreign exchange impacts on goods purchased from China were cited as a driver for the gross margin increase to 71% in Fiscal 2024 and Fiscal 2025.

Digital platforms are essential for disruptive marketing and sales. Amazon now ranks among e.l.f. Beauty, Inc.'s largest customers, with digital sales showing double-digit growth. The brand's marketing engine has seen success on platforms like TikTok, where the #eyeslipsface campaign drew nearly 10 billion views.

The company partners with non-profit organizations as part of its purpose-driven ethos. e.l.f. Beauty, Inc. has a public goal to donate 2% of its prior year profits. This commitment resulted in donations exceeding $2.5 million in FY2025.

Here's a quick look at the key retail and digital partners and associated metrics:

The partnerships extend across various channels, enabling broad market penetration:

• Major US Retailers: Target, Walmart, Ulta Beauty.
• International Retail Expansion: Rossmann (Germany, Poland), Sephora (Mexico, GCC).
• Digital Sales Channels: Amazon, TikTok, Twitch.
• Supply Chain: China-based manufacturing partners.
• Social Impact: Non-profit organizations receiving 2% of prior year's profits.

Finance: review the impact of the $200.0 million potential earnout for the rhode acquisition on FY2026 partnership-related cash flows by next Tuesday.

e.l.f. Beauty, Inc. (ELF) - Canvas Business Model: Key Activities

You're looking at the engine room of e.l.f. Beauty, Inc. (ELF) as of late 2025, focusing on the core actions that drive their market performance. These aren't just processes; they are the competitive advantages they execute daily.

Rapid, community-inspired product innovation (Holy Grail products)

e.l.f. Beauty, Inc. maintains a high-velocity product pipeline, often termed the Holy Grail innovation approach, which consistently delivers high Return on Investment (ROI) marketing campaigns. For example, the Halo Glow Skin Tint was their top selling cosmetics product on e.f.cosmetics.com in Q1. This innovation engine fuels significant market share gains; in Q1 of the current fiscal year, the company delivered triple digit share gains across face, lip, and eye makeup segments. Over the last five years, their share has more than doubled in each of these categories.

Here's the quick math on their current segment standing based on Q1 data:

What this estimate hides is the speed at which these shares shift based on the next viral launch.

Highly disruptive digital marketing and social media engagement

The company's marketing engine is designed to be disruptive, driving unaided brand awareness from 13% in 2020 to 33% in 2024. Marketing and digital investment as a percentage of net sales was 23% in Q4 of fiscal 2025, a notable decrease from 34% in the prior year's Q4. For the first quarter of the new fiscal year, marketing and digital spend was 22% of net sales, compared to 23% in the same quarter last year. Looking ahead, e.l.f. Beauty, Inc. continues to expect marketing and digital spend to hover around 24% to 26% of net sales in fiscal 2026.

Global supply chain management and diversification to mitigate tariff risks

Supply chain management is a critical activity, especially given geopolitical pressures. As of the latest reports, about 75% of e.l.f. Beauty, Inc.'s global production originates from China. This concentration exposes U.S. product imports to tariffs at the 55% level. To counter this, the company implemented a $1 global price increase on all products starting August 1. The impact of these tariffs is visible in the gross margin, which declined 215 basis points to 69% in Q1 of the new fiscal year. This decline was partially offset by favorable foreign exchange impacts on goods purchased from China and product mix.

Multi-brand portfolio management and strategic acquisitions, like rhode

e.l.f. Beauty, Inc. actively manages and expands its portfolio through strategic acquisitions to capture whitespace, particularly in higher-margin categories. The acquisition of rhode, founded by Hailey Bieber, is a prime example. The headline price for rhode is $1 billion. The structure involves an upfront payment of $800 million at closing, which is comprised of $600 million in cash and $200 million in newly issued shares of e.l.f. Beauty, Inc. common stock. There is an additional potential earnout consideration of $200 million based on the brand's growth over a three-year period. At closing, the purchase price represented approximately 3.8x rhode's Last Twelve Months (LTM) net sales of $212 million as of March 31, 2025, with all sales being DTC at that time. The company also owns Naturium, which it acquired for $333 million in 2023, and Keys Soulcare.

The portfolio composition as of late 2025 includes these key brands:

• e.l.f. Cosmetics
• rhode (Acquired August 2025)
• Naturium (Acquired 2023)
• Keys Soulcare
• Well People

Maintaining the Fair Trade Certified™ status for its products

Social and ethical standards are embedded in sourcing activities. e.l.f. Beauty, Inc. is the first and only beauty company to have 6 third-party manufacturing facilities Fair Trade Certified™. This means 73% of e.l.f. Beauty, Inc.'s product units, which equates to over 900 SKUs, are made in Fair Trade Certified™ facilities. This commitment translates to direct community investment; in FY2025, more than 3,000 workers benefited from projects funded by the e.l.f. Beauty Fair Trade Community Development Funds. Furthermore, the company's ethos includes giving back, donating at least 2% of the prior year's profits, which totaled more than $2.5 million in FY2025, to changemaking causes.

e.l.f. Beauty, Inc. (ELF) - Canvas Business Model: Key Resources

You're looking at the core assets that power e.l.f. Beauty, Inc.'s growth engine right now. These aren't just abstract concepts; they are hard numbers and established platforms that drive revenue and market share.

Strong, digitally-native brand equity and high social media virality is a massive resource. The brand's digital footprint is huge, which directly translates into lower customer acquisition costs and high trend responsiveness. For e.l.f. Cosmetics specifically, their social media presence includes over 14 million followers on TikTok, over 6.5 million on Instagram, and over 1.4 million subscribers on YouTube. The content on TikTok alone generates 1.2 billion annual views. This digital muscle helped the company achieve 25 consecutive quarters of both net sales growth and market share gains through Fiscal Year 2025.

The company's expansion strategy relies on a multi-brand portfolio, which diversifies risk and captures different consumer needs within the accessible beauty space. This portfolio includes the core e.l.f. Cosmetics, e.l.f. SKIN, Naturium, Keys Soulcare, Well People, and the recently acquired rhode brand, which e.l.f. Beauty, Inc. entered a definitive agreement to acquire in May 2025.

The asset-light, China-centric supply chain is key to maintaining the value proposition. This structure allows for cost optimization and speed, evidenced by the FY2025 Gross margin increasing to 71%, partly driven by favorable foreign exchange impacts on goods purchased from China and cost savings. Contract manufacturers, mainly in China and the U.S., have an estimated annual manufacturing capacity of 250 million units, with a reported manufacturing cost per unit between $0.75 - $1.25. Product development cycles are fast, cutting down development time to 12-18 months in 2024.

Financially, the company maintained significant liquidity. At the end of Fiscal Year 2025, e.l.f. Beauty, Inc. reported $148.7 million in cash and cash equivalents. For context, as of September 30, 2025 (Q2 FY2026), this figure had grown to $194.4 million in cash and cash equivalents. Full-year FY2025 net sales reached $1,313.5 million, with an Adjusted EBITDA of $296.8 million, representing 23% of net sales.

The proprietary consumer data and the Beauty Squad loyalty program create a powerful feedback loop. The Beauty Squad program has 4.5 million members, with enrollment growing 30% year-over-year as of Q1 FY2025. This engaged base is highly valuable; loyalty members generate nearly 80% of sales on ElfCosmetics.com and 95% of transactions on the brand's app. Furthermore, the lifetime value of a member is 166% higher than that of non-members.

• Beauty Squad Member Statistics (as reported in late 2024/early 2025 context):
• Total Members: 4.5 million
• Year-over-Year Enrollment Growth: 30%
• Sales Contribution on ElfCosmetics.com: Nearly 80%
• Transaction Share on Mobile App: 95%
• Lifetime Value Premium over Non-Members: 166% higher

Finance: draft 13-week cash view by Friday.

e.l.f. Beauty, Inc. (ELF) - Canvas Business Model: Value Propositions

You're looking at the core differentiators that let e.l.f. Beauty, Inc. capture so much market share, even against legacy players. It all boils down to delivering high perceived value without the high price tag, backed by strong ethical commitments.

The primary value proposition centers on delivering prestige-like quality at accessible prices. This isn't just a talking point; the numbers back it up. Despite a recent $1 price increase on some items due to inflation and tariffs, the commitment to accessibility remains firm.

Honestly, that $6.50 average price point against prestige brands over $20 is a massive gap for consumers to notice. It's a clear signal that you don't have to compromise quality for cost.

Ethical standards are another pillar. e.l.f. Beauty, Inc. is 100% vegan. Furthermore, all e.l.f. clean and vegan products carry the PETA and Leaping Bunny double-certification for being cruelty-free. This commitment extends through the supply chain, with 73% of e.l.f. Beauty brands' products made in Fair Trade Certified™ facilities as of Fiscal 2025 (this metric excludes the recently acquired rhode brand). This purpose-led ethos is financially quantified: the company donated more than $2.5 million in FY2025, representing at least 2% of the prior year's profits.

The speed-to-market agility is what keeps the brand relevant, especially with younger consumers. They translate community inspiration into product availability incredibly fast. This operational agility is showing up in market share gains:

• Gained 190 basis points of market share in the U.S. in Fiscal 2025.
• The namesake e.l.f. brand secured 140 basis points of market share gain in Q2 Fiscal 2026.
• The company has achieved 27 consecutive quarters of net sales growth.
• In 2024, the brand was responsible for six of the top 10 color cosmetics product launches.

Inclusivity and accessibility are driven by distribution. You see this in their retail strategy, like the expansion into Dollar General stores to serve beauty deserts. At their top retailer, Target, e.l.f. accounts for more than 20% of the category's sales, with Target setting a goal for e.l.f. to become their first $1 billion beauty brand (currently tracking around $0.5 billion in retail sales there). Internationally, the CAGR over the last 5 years has been 55%, supported by recent expansion into over 1,200 new international locations as of May 2025.

Finally, the commitment to sustainability is concrete. For Fiscal 2025, e.l.f. Beauty, Inc. achieved a 33% reduction in packaging intensity compared to a 2019 baseline, surpassing their 2030 goal of a 20% reduction. Also, 100% of cosmetic brushes' wood handles now use Forest Stewardship Council-certified wood.

e.l.f. Beauty, Inc. (ELF) - Canvas Business Model: Customer Relationships

You're looking at how e.l.f. Beauty, Inc. keeps its massive customer base engaged, and honestly, it's a masterclass in blending digital hype with tangible loyalty. The relationships aren't just transactional; they're built on constant, two-way conversation.

Direct, high-engagement relationship via social media (TikTok, Instagram)

e.l.f. Beauty, Inc. treats its social channels not as billboards but as the main stage. This direct, high-engagement approach is key to relating to the Gen Z and Millennial core. As of mid-2025, the brand commands a massive digital footprint, boasting 7.5 million followers on Instagram and 2.4 million on TikTok. This isn't just vanity following; it drives action. The company's history with viral campaigns, like the original #eyeslipsface challenge, which spawned a song and reached over one billion viewers, shows their ability to turn content into community participation. The brand's digital-first strategy means these platforms are central to acquisition and retention, with digital channels driving 24% of total consumption in the October-December 2024 quarter.

The Beauty Squad loyalty program for personalized rewards and feedback

The Beauty Squad loyalty program is defintely the engine for high-value customer relationships, especially in the direct-to-consumer (DTC) space. As of early 2025 reports, the program had grown to over 5.6 million members, showing 20 percent enrollment growth. The financial impact is clear: loyalty members generate nearly 80% of sales on ElfCosmetics.com and 95% of the brand's app transactions. Furthermore, the lifetime value for a member is 166% higher than for a non-member. This program is now in its fifth phase, focusing on gamification, personalized communications via the mobile app (which has over 3 million downloads), and incorporating feedback into product development. The investment in this relationship is significant; marketing and digital spend was 27% of net sales in the third quarter of fiscal 2025.

Mass-market self-service model through retail shelf presence

While the digital game is strong, the mass-market self-service relationship through physical retail remains foundational. You see e.l.f. Beauty, Inc. products on the shelf at major retailers, which is how they achieve broad accessibility. Nationally, e.l.f. cosmetics holds a 14% unit share, making it the No. 1 brand on a unit basis, and a 12% dollar share as the No. 2 mass brand. At their top retailer, Target, the brand commands over 20% market share in cosmetics. This physical presence supports the brand's core value proposition of offering high-quality products at accessible price points, with 75% of e.l.f. Cosmetics products priced at $10 and under.

Community co-creation and user-generated content (UGC) campaigns

The brand actively solicits and amplifies user-generated content, turning customers into co-creators. This strategy is deeply embedded in their social engagement. The viral #eyeslipsface campaign is the prime example, generating millions of UGC videos. This community-driven approach is part of their ethos, which CEO Tarang Amin prioritizes for relating to Gen Z. The focus on community is also evident in their purpose-driven campaigns, like the 'Give an e.l.f.' initiative tied to their FY2025 Impact Report, encouraging community action.

Dedicated customer service for e-commerce channels

For the direct-to-consumer experience, dedicated support is necessary to maintain the high-touch feel of the digital relationship. The brand has focused on creating a cohesive consumer journey within its app, using technology to streamline interactions. Personalization efforts, which leverage first-party data, have directly impacted engagement metrics, showing a 17.6% uplift in customer engagement. While specific customer service resolution times aren't public, the investment in digital infrastructure and the mobile app's 4.9 out of 5 rating suggest a focus on positive digital support experiences.

Here's the quick math on the digital relationship strength:

Finance: draft the projected impact of the rhode acquisition's earnout structure on FY2026 marketing budget allocation by end of month.

e.l.f. Beauty, Inc. (ELF) - Canvas Business Model: Channels

The distribution strategy for e.l.f. Beauty, Inc. centers on a multi-pronged approach, balancing the volume of mass-market retail with the high-growth potential of digital and prestige channels.

Mass-market national retailers (Target, Walmart, Ulta Beauty) driving the bulk of sales.

The traditional retail footprint remains foundational, driving significant volume. For the twelve months ended March 31, 2025, net sales for e.l.f. Beauty, Inc. grew 28% to $1,313.5 million, strength noted across retailer channels. At Target, e.l.f. Beauty's longest-standing national retail customer, the brand holds a 21% cosmetics share, an increase of 190 basis points in the first quarter of fiscal 2026. The company is replicating success across all major tracked channel partners, posting triple-digit share gains with them in Q1 of fiscal 2026. Furthermore, e.l.f. Beauty is expanding distribution in channels like Dollar General.

Direct-to-Consumer (DTC) e-commerce platform, e.l.f.cosmetics.com.

The company's e-commerce channel is a significant growth engine. For the quarter ended June 30, 2025, e-commerce revenue grew close to 20%. Overall, e-commerce channels contributed to the 28% net sales increase for the full fiscal year 2025. E-commerce revenue now represents about one-fifth of the total business.

Third-party e-commerce platforms, notably Amazon, which is a key customer.

Digital sales, including third-party platforms, remain strong. Amazon is specifically noted as ranking among e.l.f. Beauty, Inc.'s largest customers.

International retail expansion in the UK, Canada, and new markets like Poland.

International markets are e.l.f. Beauty, Inc.'s fastest-growing segment. For the first quarter of fiscal 2026 (ended June 30, 2025), international net sales climbed 30% year-over-year, while U.S. net sales rose 5%. International sales now account for 20% of total sales, up from 10% six years prior. In fiscal 2025, e.l.f. gained 170 basis points in market share in Canada and 270 basis points in the UK. The company is aggressively expanding in Europe, with plans to launch in 1,200 Kruidvat stores in the Netherlands and Belgium, and enter 1,000 Rossmann stores in Poland. In other markets, e.l.f. became the #1 brand in Belgium and #2 in the Netherlands.

Strategic prestige channel entry with rhode's rollout into Sephora US/Canada/UK.

The acquisition of rhode for up to $1.0 billion signals a strategic move into the prestige channel. rhode officially launched at Sephora online and in all U.S. and Canada stores on September 4, 2025, a launch slated to be the largest in Sephora North America's history. Additional plans include a rollout to the U.K. in Fall 2025. Prior to the retail launch, there were over 2 million unique searches for rhode across Sephora's site and app in the preceding year. rhode achieved $212 million in net sales in the 12 months ended March 31, 2025, exclusively through DTC channels. Weekly sales for rhode peaked at $4.7 million in early July 2025, driven by product launches.

Here's a quick view of key channel performance metrics as of late 2025:

The company's overall channel strength is reflected in its 25th consecutive quarter of net sales growth, ending Q4 of fiscal 2025.

• rhode's Sephora US/Canada launch was the largest skincare brand debut in Sephora North America's history.
• rhode is planned for a UK rollout through Sephora in Fall 2025.
• e.l.f. Beauty is expanding its European physical retail presence with planned launches in 1,200 Kruidvat stores and 1,000 Rossmann stores in Poland.
• Amazon is a key third-party e-commerce customer.

e.l.f. Beauty, Inc. (ELF) - Canvas Business Model: Customer Segments

e.l.f. Beauty, Inc. targets Gen Z and Millennial consumers who are digital-native and trend-aware. The company utilizes its massive social media presence, including 7.5 million followers on Instagram and 2.4 million on TikTok, to inform product and marketing decisions. This focus has resulted in e.l.f. Beauty being ranked as the No. 1 cosmetics brand among female teens in a survey.

The mass-market beauty shoppers are served through a value proposition where 75% of e.l.f. Beauty products remain priced under $10 following a $1 price increase across the assortment. In tracked channels during the latest quarter, e.l.f. Beauty achieved market share of 10.4%, marking its fifth consecutive quarter as the number one brand in total units, with a 170 basis points increase in market share in that quarter.

Ethically-conscious consumers are addressed through the brand's inherent positioning, which aligns with preferences for clean, vegan, and cruelty-free products.

Prestige beauty consumers are now targeted via the newly acquired rhode brand, which was acquired on August 5, 2025, for $800.0 million at closing, with a potential earnout up to $200.0 million. In the twelve months ended March 31, 2025, rhode generated net sales of $212 million exclusively through its direct-to-consumer business. Rhode's current aided awareness in the US stands at 20%.

The growing international customer base in Europe and Canada is a key focus area. International net sales climbed 30% year over year in Q1 FY26, and this segment now accounts for 20% of total sales, up from 10% six years prior.

Key quantitative metrics related to customer segments and sales channels include:

The brand's channel and geographic penetration highlights include:

• Cosmetics share at Target: 21% in Q1.
• Market share gain in Canada: 170 basis points in Fiscal 2025.
• Market share gain in the UK: 270 basis points in Fiscal 2025.
• International Net Sales Growth: 60% in Fiscal 2025.

e.l.f. Beauty, Inc. (ELF) - Canvas Business Model: Cost Structure

The cost structure for e.l.f. Beauty, Inc. is heavily influenced by product volume, supply chain dynamics, and aggressive brand building investment.

High variable cost of goods sold (COGS) exposure exists due to the scale of product volume and significant tariff risk. With 75% of its supply chain originating in China, e.l.f. Beauty faces rising costs tied to import duties, which led the company to pull fiscal 2026 guidance due to tariff uncertainty. Logistics and transportation costs are a recognized factor, though the company achieved gross margin expansion in FY2025, partially offsetting these pressures through cost savings.

Selling, General, and Administrative (SG&A) expenses represent a significant portion of costs. For the full fiscal year 2025, SG&A expenses totaled $777.7 million, representing 59% of net sales for the twelve months ended March 31, 2025. This total dollar increase was primarily related to increased marketing and digital spend, compensation and benefits, and other operational costs.

A large, ongoing investment in marketing and digital spend fuels customer acquisition and brand relevance. For the third quarter of fiscal 2025, this investment was about 27% of net sales. For the full fiscal year 2025, total expenses for marketing and digital were $318.8 million, which equated to approximately 24% of net sales.

Major capital deployment occurs through strategic acquisitions. The May 2025 deal to acquire rhode was valued up to $1 billion. The initial closing consideration was $800 million, comprised of $600 million in cash and $200 million in newly issued e.l.f. Beauty shares, alongside a potential $200 million earnout based on future performance over three years. The closing purchase price represented approximately 3.8x rhode's Last Twelve Months (LTM) net sales of $212 million as of March 31, 2025.

Here's a quick look at some key cost-related financial metrics from the latest reported periods:

The cost drivers within SG&A include:

• Higher marketing and digital spend.
• Increased compensation and benefits expense.
• Operations costs and general administrative expense.
• Retail fixturing and visual merchandising costs.

The gross margin performance reflects efforts to manage COGS exposure:

• Gross margin in FY2025 increased approximately 50 basis points to 71%.
• Benefits came from favorable foreign exchange impacts on goods sourced from China.
• Benefits also came from internal cost savings and inventory adjustments.
• Offsets included product mix changes and higher transportation costs.

Finance: draft 13-week cash view by Friday.

e.l.f. Beauty, Inc. (ELF) - Canvas Business Model: Revenue Streams

e.l.f. Beauty, Inc. generates revenue through the sale of its diverse portfolio of beauty products across multiple channels and geographies.

Net Sales for Fiscal Year 2025 were $1,313.5 million, up 28% year-over-year. This performance marked the 25th consecutive quarter of net sales growth for the company as of the end of Fiscal 2025 (ended March 31, 2025).

The revenue streams are segmented by channel and brand portfolio, reflecting a strategy focused on both mass-market disruption and expansion into prestige categories.

Revenue streams are sourced through several key avenues:

• Wholesale revenue from major national and international retail partners.
• E-commerce sales from the DTC site and third-party platforms like Amazon.
• Sales from the multi-brand portfolio: e.l.f. Cosmetics, e.l.f. SKIN, Naturium, Keys Soulcare, Well People, and the recently acquired rhode.

Wholesale channel strength is evident through key retailer performance. At Target, e.l.f. holds a 21% cosmetics share, representing a 190 basis points increase in Q1 FY26.

E-commerce sales are a significant growth engine, with the Amazon channel ranking among e.l.f. Beauty, Inc.'s largest customers. The company is actively integrating the newly acquired rhode brand, which closed on August 5, 2025, for an initial consideration of $800.0 million, with a potential earnout of up to $200 million based on future growth.

International sales, which grew 30% year-over-year in Q1 FY26, have grown from representing 10% of sales six years prior to reaching 20% of total sales in Q1 FY26.