🎙️Q&A with E.l.f. Beauty CFO Mandy Fields: "The consumer is being choiceful with their dollars."
Consumers are heading into the holiday shopping season with two lists — one of gifts for their family and friends and the other showing a collection of concerns about job stability, the economy, tariffs and rising prices.
In this nervous spending environment, shoppers are changing their buying habits. They’re purchasing fewer products, trading down on prices, or trying to stretch their budgets by curtailing their discretionary spending in other ways, including eating out less and skipping vacations.
But according to Mandy Fields, CFO of affordable beauty brand E.l.f. Beauty ELF 0.00%↑, self-care isn’t fully ignored in times of uncertainty but it is approached differently.
Here’s what Fields shared in an interview with Bagable.com (edited for length and clarity):
What are you seeing with the way consumers are shopping for skincare and cosmetics products?
Fields: E.l.f. is really focused on providing value to the consumer, with 75% of our portfolio at $10 or less. A lot of things are going on in the economy right now. You have a government shutdown, SNAP benefits not going to folks who need them, layoffs and tariffs.
So, I think the consumer is, and we’ve seen this for some time, just continuing to be choiceful with where they spend their dollars. They have a finite amount of money.
What I love about E.l.f. is that we represent that value. You can buy a couple of lipsticks or our lip balms and still have money left in your pocketbook.
How are the macroeconomic challenges on households impacting their approach to beauty and skincare?
Color cosmetics are like a pick-me-up. I wear my red lipstick every day. That is a pick-me-up. If we look back over the last 10, 15 or 20 years, the market share for color cosmetics, in particular, has grown 2% to 3% on average, every year. It’s a category that continues to deliver year after year because the consumer gets that mood lift from it, particularly with affordable beauty and skincare.
The most recent time we have to look back on is the pandemic. A lot of our consumers are Gen Z. Even during the pandemic, that cohort continued to participate in the beauty category. We saw tremendous growth during that time and [coming] out of the pandemic. Beauty is much more resilient than other kinds of discretionary consumer categories.
Again, going back to price points, if you can pick up something for less than $10 and you’ve only got $20 to spend on your splurge for the week, you still have money left over if you choose to buy on the mass market side, and E.l.f. represents that.
Within E.l.f.’s portfolio of brands, are you seeing any shifts how your customers are buying products? Are they trading down in price points?
The great thing about E.l.f. Beauty is that we have a portfolio of brands that really spans the spectrum. We have the E.l.f. brand at very reasonable, accessible price points on the mass side. And even for Rhode, I would call Rhode accessible on the prestige side.
As you know, there are lipsticks out there that cost up to $160. So Rhode being closer to $28 to $30 on average for its products, is still quite accessible, even on the prestige side.
We have strength in the mass market with our core retailers, Target TGT 0.00%↑, Walmart WMT 0.00%↑, Ulta ULTA 0.00%↑and now we have a complementary brand in Rhode, which is starting to build that kind of prestige presence.
I think that we are accessible to everyone who wants to participate in beauty, whether you want to participate in mass or on the prestige side, our portfolio of brands really offers you an opportunity to do it across the board.
What are your expectations for the holiday season?
I’m projecting that consumers will want to participate in this category. And we have some awesome items.
We don’t offer big [beauty and skincare] holiday kits. We always say that with E.l.f. [products], whether we put it in a kit or you put it in a stocking, it’s very giftable.
We have some of our Glitzshow eyeshadow sticks coming out for $8, limited time only. We have our Glow Reviver Melting Lip Bombs in delicious flavors, like peach ring, cotton candy crush, and vanilla soft serve. These are perfect for a Gen Z gifting and those are at $9.
On the Rhode side, we have Hailey’s birthday, which is in November, and she is going to have some special surprises for her birthday drop. So we got a lot of things going on for the holiday season.
[E.l.f. Beauty acquired Hailey Bieber’s Rhode skincare brand in a $1 billion deal in May]
A majority of E.l.f. Beauty’s products are sourced from China. The company raised prices by $1 in August to offset higher costs from tariffs and inflation. Is this one and done or could there be another price increase in the future?
I’ll give you good news on tariffs. Just last week, the administration talked about dropping the tariff by about 10 [percentage] points. So previously, we were exposed to tariffs at the 55% level Now we’re at 45%. So that’s actually a little bit of relief as we look into the second half of the year.
We believe our brand is pretty elastic. And just looking at the results of the August 1st price increase, even though it’s still early days, our consumption remains strong after that price increase. And we’ve really held price increases for these macro events.
This is only the third price increase we’ve taken in E.l.f.’s history. We’re very mindful of maintaining our value proposition and balancing that with what our consumers and our community is looking for.
We’ve also made progress in our [product sourcing] diversification. That’s one of the levers that we have at our disposal to help offset some of these tariffs by continuing to diversify to other countries with lower tariffs or no tariffs, or even working with our suppliers that are in China and finding ways to help them set up operations outside of China.
Also, with the acquisitions of Naturium and Rhode, we’re diversifying our supply chain with their supply chains largely in the US, Europe and South Korea. Plus, we continue to grow our international footprint, which also helps offset the tariff impact.
What are you excited about going into 2026?
Well, we have so much white space opportunity ahead of us. I want us to continue to chip away at becoming the number one cosmetics brand here in the US.
We’re going to continue to make progress on our international expansion. Only 20% of our sales are outside of the US today versus our beauty peers who have 50% to 70% of their sales outside of the US.
[Related: E.l.f. Beauty reported its fiscal second-quarter results on Wednesday and provided a cautious outlook]
This interview was such a nice contrast to a different makeup-related commercial that came out earlier in the week!