Well, we will remain invested. While the empire grows. @Dividendenopi
@Semos25
My dears,
Let someone tell you that the CEO plays no role in his choice of companies.
Affordable cosmetics brand elf has achieved something that baffles many retailers: How to win over the ever-demanding Generation Z.
elf's recipe for success includes low prices for high-quality products, viral TikTok copies of expensive brands' products and popular marketing campaigns that appeal to the youngest customers. With 28 consecutive quarters of sales growth, the strategy seems to be working.
Last May, however, elf Beauty took a huge - and extremely costly - gamble and entered a completely new business segment. The company invested one billion dollars in the acquisition of rhode, a make-up and skincare brand founded by Hailey Bieber. It is a brand that eleven usually copies.
The acquisition is an important part of elf CEO Tarang Amin's plan to build the company into a 21st century beauty company: inclusive, designed for and by Generation Z and a trendsetter rather than a copycat.
"We want to be a different cosmetics company," Amin told CNN at the company's headquarters in Oakland. "We will build brands that challenge norms, shape culture and connect communities."
But Elf faces some challenges, including looming tariffs and a government that rejects any efforts toward diversity, equality and inclusion. And with sales growth of copycat products slowing, the company's future as an industry giant depends on Rhode's success.
Virality as a key factor
Amin, who was born in Kenya, has Indian roots and immigrated to the United States as a child, became CEO of elf in 2014. He is at the heart of the company's marketing machinery - and at a time when cheap dupes and beauty hacks are spreading like wildfire on social media, marketing is just as important as developing new products.
He told CNN that he places great value on an open company culture and relies on the expertise of his young employees. Every two weeks, he holds a staff meeting where his predominantly Generation Z employees (whom he affectionately calls "Ellfz") do breathing and stretching exercises together. Every employee can participate in conference calls to test and evaluate new products, and so far there have been no leaks.
"Some people who came to us from larger companies were shocked. They said: 'My God, these are your atomic codes'," said Amin. However, as he is not a make-up fan himself, he relies entirely on his young, dedicated employees, who know exactly what customers want.
In his early days at elf, Amin's head of marketing told him that the company needed to be on TikTok because that's where Generation Z was. "And my response was: 'Well, if Generation Z is there, absolutely. But what is TikTok actually?" said Amin.
The company has changed a lot since then. In 2019, the entire business model was restructured. The 22 brick-and-mortar stores were closed, the money saved was invested in marketing and relationships with major retailers such as Target and Walmart were strengthened.
The company's duplicates were also very popular online around this time. Elf launched a long list of products that quickly became coveted products during the rise of TikTok, including the Poreless Putty Primer for $11 (Tatcha's comparable product costs $55) and the Halo Glow Liquid Filter for $14 (compared to Charlotte Tilbury's Hollywood Flawless Filter for $50).
The dupes, coupled with clever marketing campaigns, made for a big hit with Generation Z consumers: "We sometimes say we're an entertainment company that also happens to sell beauty products," said Amin.
A major acquisition
Virality is what Rhode and elf have most in common, and it is a key factor in the emergence of a modern beauty giant.
Rhode became an instant hit after Bieber's launch in 2022, generating net sales of $212 million in its last financial year with just ten products. The viral hype around products like Rhodes Glazing Milk face serum - as well as the enthusiasm for Bieber's personality - even prompted fans to camp out overnight at pop-up events.
"People are buying the whole brand, the whole lifestyle and the products," Amin said.
That's why Amin believes elf can be successful at both Dollar General and Sephora , where rhode recently launched. Amin explained that elf is currently looking at 120 different brands for potential acquisitions - a sign that its vision for elf goes beyond its core business of high-end beauty fragrance brands.
Nevertheless, the acquisition of Rhode represents a very different kind of acquisition for elf, which has previously acquired skincare and clean beauty brands Naturium, Keys Soulcare and Well People.
Notably, Rhode is in the "affordable luxury" segment: starting at $20 for lip treatments, $32 for Glazing Milk and up to $38 for a Caffeine Reset Sculpting Cream Mask.
For eleven, Rhode's success is crucial - literally. Rhode contributed $128 million to the company's sales growth in the third quarter, and the sales forecast for this year has been raised to $265 million, representing growth of up to 70%. The original beauty brand of eleven, on the other hand, only recorded growth of 2% in the third quarter of 2026.
Political pressure and increased efforts for diversity
Last August, elf raised its prices by one dollar in response to the tariffs imposed by the Trump administration. (Three-quarters of products continue to cost $10 or less.) At the time, about 75% of elf products were made in China, which is at the center of President Donald Trump's chaotic trade war.
The company made a point of explaining the spike in posts on social media due to the tariffs - a marked contrast to other U.S. retailers who were banking on creeping price increases and a kind of "shrinkflation." This came at a time when the White House was cracking down on business leaders who spoke openly about the cost of tariffs.
"Consumers are smart," Amin said. "When you try to put a different spin on it, put a different spin on it, it actually gets in the way of the real dialog we're having with our community."
Meanwhile, the workforce of eleven is also a political statement. After Trump targeted DEI programs in the public and private sectors, many companies publicly withdrew from such initiatives.
But Amin has followed up. He says elfz are 76% women, 74% members of Generation Z or millennials and 44% are from diverse backgrounds. (He also grants every employee shares in the company, giving them a stake in its success).
And in the spirit of elf, the promises of gender equality and inclusion were accompanied by a cheeky advertising campaign. In 2024, elf launched the "Sooo many Dicks" campaign, which pointed out that there are more men named Richard, Rich and Rick on the boards of US public companies than entire groups of underrepresented women. The posters were mainly seen in Wall Street hotspots, such as the Oculus in New York's financial district.
"In fact, it would be riskier if we were to abandon our beliefs," Amin said. "Our community would find out immediately. And they would hold us accountable."
CNN's Clare Duffy contributed to this report.
https://www.cnn.com/2026/02/14/business/elf-beauty-ceo-dei-tariffs-risk-takers
