E.l.f. Beauty expands marketing push as pricing resets support cosmetics growth

Traders Union
All News
Business & Wealth
Companies
E.l.f. Beauty marketing strategy

Highlights

E.l.f. Beauty raised product prices by about $1 in August 2025 due to tariffs and inflation, impacting sales despite 75% of portfolio priced at $10 or less.
After receiving $50 million in tariff refunds and related interest, E.l.f. reversed many price hikes and grew net income about 100% with a 14 percentage point gross margin expansion in Q1 ending August.
E.l.f. directs 23–25% of net sales to marketing, intensifying digital and influencer engagement while leveraging social trends to accelerate innovation and product launches.

Pricing strategy and tariff-related adjustments

As reported by CNBC, E.l.f. Beauty CFO Mandy Fields says the company is trying to preserve its founding mission of making beauty accessible even as it scales through acquisitions and global growth. E.l.f. recorded its 30th consecutive quarter of net sales growth in August, while annual net sales for its fiscal 2026 year, which ended in March, rose 25% year over year to $1.636 billion.

The company’s recent expansion includes the $355 million acquisition of skincare brand Naturium in 2023 and the $1 billion acquisition of lifestyle beauty brand Rhode in 2025. Fields, who has served as CFO since 2019, says affordability remains central to the business, with 75% of E.l.f.’s portfolio priced at $10 or less.

That positioning comes as consumers remain selective in their spending, a trend Fields says is affecting much of retail. E.l.f. raised prices by about $1 across its product portfolio in August 2025, citing both tariffs and inflation, after the Trump administration’s tariff policy created headwinds for the company, which sources roughly 40% of its products from China.

Fields says the higher prices ultimately reduce sales, even though the company is transparent about the increases. After the Supreme Court strikes down the tariff policies, E.l.f. receives about $50 million in tariff refunds, plus related interest payments, helping net income grow about 100% and gross margin expand by 14 percentage points year over year in the company’s first quarter ending in August, according to its earnings report.

When the refunds arrive, E.l.f. reverses many of its earlier price increases. The company finds that only about 10% of items post a meaningful sales increase after those reductions, and it is using part of the refund to keep those products at the lower price point.

Social media spending and consumer engagement

A larger share of the refund is going into marketing, which Fields describes as a core priority for the business. She says E.l.f. spends 23% to 25% of net sales on marketing and digital efforts to maintain a close connection with its customer base.

Influencer marketing remains a key part of that approach, with the company leaning heavily on social media creators to build awareness around new products. Fields says E.l.f. works with some large influencers, but most of its spending goes to mid-sized and smaller creators, which it sees as having more authentic ties to their communities.

Fields also says many posts about E.l.f. products happen organically, with creators choosing whether to feature products sent to them. The company monitors comments, TikTok livestreams and broader social media discussions to identify emerging demand and convert that feedback into product development.

That process has already shaped launches across the portfolio. Fields says E.l.f. introduced bronzing drops after hearing requests during a TikTok live and also created a pickle lip balm after pickles gained traction as a social media trend, underscoring how digital engagement is informing both brand marketing and innovation.

Our earlier article on rising U.S. toy prices explained how tariffs on Chinese imports, along with higher oil, commodity, and shipping costs, were pushing shelf prices up ahead of the holiday season. It also noted that even after tariff rates eased, retailers and manufacturers still faced margin pressure because many goods were priced under the earlier, higher-tariff regime and because broader logistics and input costs remained elevated.

This material may contain third-party opinions, none of the data and information on this webpage constitutes investment advice according to our Disclaimer. While we adhere to strict Editorial Integrity, this post may contain references to products from our partners.