"E.l.f. has taken the mass cosmetics industry (with its widely available and affordable brands) by storm over the past several years, winning huge market share away from incumbents and gaining shelf space. It's done this primarily by using a fast-follower strategy and influencer marketing. Taking a page out of the fashion industry, and popularized by clothing brands like Zara, e.l.f. would make copies of hot-selling prestige brands and sell them at a fraction of the price."
"Last year was a roller coaster ride for e.l.f. Beauty (NYSE: ELF), but also a transformational one. The company continued to take market share, but it did see its swift revenue growth stall after running into some industry headwinds and tariff pressures. E.l.f. also acquired the prestige skincare brand Rhode, which helps set it up for its next leg of growth. The growth stock is now down about 40% from its highs, but its long-term outlook remains strong."
E.l.f. Beauty used a fast-follower product strategy and influencer-led social campaigns to capture significant market share in the mass cosmetics sector. The brand replicated popular prestige products at lower prices while maintaining generally good quality and expanded retail distribution, notably at Target and Ulta. Management focused on younger and Hispanic consumers and leveraged platforms like TikTok to drive awareness and sales. Revenue growth slowed amid industry headwinds and tariff pressures, but the acquisition of prestige skincare brand Rhode provides a potential new growth driver. The stock declined about 40% from its highs and appears attractively valued after the pullback.
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