How E.L.F. Just Flexed By Exposing Hailey Bieber’s Entire P&L (And What It Reveals)

[Sponsored Ad]

I’ve been using Ketone-IQ to sharpen my mental focus, sustain clean energy, and keep my brain firing on all cylinders throughout the day and after speaking with the team, they’ve agreed to give you an exclusive 30% off your order: Grab yours here.

---

Hey,

Something wild just happened in the beauty world that basically never happens.

E.L.F. disclosed Rhode’s full P&L. Like, the entire financial breakdown of Hailey Bieber’s skincare brand. Every margin. Every cost. Every pound accounted for.

And honestly? This is the kind of transparency that makes my finance head sing because we almost never get to see the real numbers behind celebrity brands.

Let me break down what this tells us about how modern beauty brands actually make money (and why E.L.F. just pulled off one of the smartest acquisitions in recent memory).

The Numbers That Matter

Before we dive deep, here’s the snapshot that has everyone talking:

Rhode’s P&L Breakdown:

• Product COGS: 19% of sales

• Cost of Delivery: 15%

• Marketing: 11%

• G&A (General & Administrative): 17%

• EBITDA Margin: 34%

Now, if you’re not in the beauty business, those numbers might not mean much. But trust me this is basically a masterclass in how to build a celebrity brand that actually works.

Let me explain why each of these matters.

Product COGS: 19%

This one blew my mind.

Rhode’s hero product the Glazing Milk that everyone and their mum is obsessed with costs just over £4.50 to make and sells for £24.

That’s a roughly 5x markup. In “mastige” beauty (that sweet spot between mass and prestige), that’s really strong.

For context, most DTC beauty brands are sitting at 25-30% COGS. Rhode is operating more like a traditional beauty giant with scale and efficiency.

The insight: They actually engineered products that could be manufactured efficiently whilst maintaining quality. That’s rare for a celebrity brand, especially one that launched so recently.

Cost of Delivery: 15%

Pretty standard for a DTC-heavy brand, but solid execution.

Rhode isn’t burning money on shipping like some DTC darlings did during the 2010s growth-at-all-costs era. They’ve got logistics sorted.

Why this matters: A lot of celebrity brands ignore the operational stuff and wonder why they’re haemorrhaging cash. Rhode clearly sweated the details from day one.

Marketing: 11%

Okay, this is where things get absolutely mental.

Only 11% of revenue goes to marketing.

Most DTC beauty brands are spending 30-50% on customer acquisition. Some are burning even more trying to fight the Instagram and TikTok algorithm.

Rhode? 11%.

Why? Because Hailey Bieber IS the marketing.

When you have 50+ million Instagram followers who actually care what you use, you don’t need to blow money on Meta ads. Every product drop is an event. Every selfie is an advert. Every red carpet appearance is product placement.

The kicker: They had a 9x marketing efficiency ratio (MER) pre-acquisition. That means for every pound spent on marketing, they generated £9 in revenue.

That’s not just good that’s elite. That’s “how did they even do that” territory.

G&A: 17%

Here’s the only real weakness in the model.

17% for general and administrative costs is surprisingly high for a young, lean brand. There’s definitely some bloat here that E.L.F. can optimise.

What this tells us: Rhode probably had to build a lot of infrastructure from scratch and hire expensive talent to establish credibility. Or there were some inefficiencies that come with being a celebrity-founded brand where everyone wants to work but not everyone adds value.

The opportunity: E.L.F.’s existing infrastructure can absorb a lot of these costs, which means this margin will improve significantly post-acquisition.

EBITDA Margin: 34%

Let me just say this clearly: A 34% EBITDA margin is absolutely exceptional.

For context:

• Most DTC brands are at 10-15%

• Traditional beauty companies aim for 20-25%

• The really good ones hit 30%

Rhode is at 34% whilst still being a relatively young brand.

This is beauty royalty territory. Not just good. Elite.

What this means: Every pound of revenue is turning into real profit at a rate that would make most CFOs weep with joy.

What E.L.F. Actually Bought

Here’s the thing most people are missing: E.L.F. bought a blueprint for how cultural capital converts to business equity in 2025.

Think about it:

Traditional Celebrity Brand Playbook (that doesn’t work anymore):

1. Get famous person

2. Slap their name on generic products

3. Spend 50% of revenue on marketing

4. Hope people buy it

5. Watch it fail in 3 years

The Rhode Playbook (that actually works):

1. Founder with genuine influence and credibility

2. Actually good products with smart unit economics

3. Let the founder’s platform do the marketing

4. Build operational efficiency from day one

5. Generate real profit, not just hype

The result: A brand that doesn’t just have cultural relevance it has an actual, sustainable business model underneath.

The Transparency Flex

Now let’s talk about why E.L.F. released all this.

Companies basically never do this. When you acquire a brand, you might share top-line revenue or some vague metrics. But the full P&L? Every margin? That’s rare.

E.L.F. is flexing. And they should be.

By showing these numbers, they’re saying:

• “Look how good this deal was”

• “We know how to pick winners”

• “We understand modern beauty better than anyone”

• “Celebrity brands can actually work if built right”

It’s also a massive signal to other potential acquisition targets: If you’ve got strong unit economics and real cultural influence, we’re interested.

What This Means for Celebrity Brands

For years, celebrity beauty brands have had a reputation problem.

They launch with hype, maybe get some sales, then fade away when the next thing drops. Most of them are just licensing deals with terrible margins and no real business underneath.

Rhode proves the model can work if you do it right.

The requirements:

1. Authentic founder involvement: Hailey is clearly involved, not just lending her name

2. Product quality: The products actually work and people repurchase

3. Operational discipline: 19% COGS and 15% delivery costs don’t happen by accident

4. Efficient marketing: Leverage the platform you already have

5. Real business thinking: Margins and unit economics matter from day one

The Lessons for Any Brand Builder

You don’t need 50 million Instagram followers to apply these principles:

1. Know Your Economics From Day One Rhode clearly thought through margins before launching. What does your product actually cost? What can you sell it for? What’s your path to profit?

2. Leverage Your Unfair Advantage Hailey’s advantage is influence. What’s yours? Deep expertise? Unique distribution? Community access? Use what you have instead of copying what others do.

3. Don’t Burn Money on Marketing If You Don’t Have To Rhode spent 11% because they didn’t need to spend more. Too many brands over-index on paid ads when they could build organic channels.

4. Operational Excellence Matters The sexy stuff is the product launches and the Instagram posts. The profitable stuff is getting COGS to 19% and delivery to 15%.

5. Profit Is the Product 34% EBITDA margin is what makes this a real business instead of a vanity project. What’s your path to actual profitability?

Why This Changes Everything for DTC Brands

Let’s be real for a second. The DTC playbook from 2015-2020 is dead.

Remember when the strategy was:

• Raise £40M in VC funding

• Spend 60% on Facebook ads

• Lose money on every customer for the first 3 years

• Hope you reach scale before the money runs out

• Get acquired or die trying

Rhode just proved there’s a better way.

They built a profitable business from jump. They used influence instead of burning cash on adverts. They focused on margins, not just growth.

And now they’re getting acquired by a public company that’s willing to show the world exactly how good the numbers are.

The Real Genius: The 9x MER

Let me nerd out on this for a second because the 9x Marketing Efficiency Ratio is absolutely bonkers.

What does 9x MER mean? For every £1 Rhode spent on marketing, they generated £9 in revenue.

Industry context:

• Most DTC brands celebrate 3x MER

• 4-5x is considered excellent

• 6x+ is elite territory

• 9x is basically unheard of

How did they do it?

Think about a typical beauty brand launch. They need to:

• Build brand awareness from zero

• Pay influencers for posts

• Run Meta and TikTok ads

• Sponsor content creators

• Maybe do some PR

Rhode? Hailey posted about it. That’s it. Instant awareness to 50+ million highly engaged followers who trust her taste.

Every time she does her skincare routine on Instagram Stories? Free marketing. Every time a paparazzi catches her with that glazed donut skin? Free marketing. Every time another celebrity asks what she uses? Free marketing.

The compounding effect: When you have an authentic founder with real influence, every pound you spend on marketing goes 9x further because the audience is already warm.

The G&A Problem (And Opportunity)

Now let’s talk about that 17% G&A number because it’s actually the most interesting weakness in the model.

Why is it high?

My theory: Rhode probably made some classic celebrity brand mistakes early on:

• Hired expensive consultants to prove credibility

• Built custom systems instead of using off-the-shelf

• Paid premium salaries to attract talent away from big beauty

• Created processes from scratch that bigger companies already have

The E.L.F. opportunity:

This is where the acquisition gets really smart. E.L.F. can immediately absorb Rhode into their existing infrastructure:

• Use E.L.F.’s accounting and finance teams

• Leverage E.L.F.’s supply chain and logistics

• Integrate into E.L.F.’s existing legal and HR functions

• Share technology and systems

Conservative estimate: E.L.F. can probably cut 5-7 percentage points from G&A just through operational synergies.

That would take the EBITDA margin from 34% to 39-41%.

At scale, that’s the difference between a good acquisition and a legendary one.

What the Deal Structure Probably Looks Like

E.L.F. hasn’t disclosed the full deal terms, but based on typical beauty acquisitions at this profile, here’s my educated guess:

Likely Deal Structure:

• Purchase price: £400M-650M (based on 3-5x revenue multiples for profitable beauty brands)

• Earnout structure: Additional payments based on hitting growth targets over 3-5 years

• Hailey’s ongoing role: Brand ambassador with equity incentives to stay involved

• E.L.F.’s bet: They can scale Rhode to £400M+ in revenue within 5 years whilst maintaining 35%+ margins

Why this works for both sides:

For Rhode/Hailey:

• Liquidity event whilst still young

• Access to E.L.F.’s distribution and scale

• Ability to focus on brand whilst E.L.F. handles operations

• Potential for earnouts if growth continues

For E.L.F.:

• Proven profitable brand with room to optimise

• Celebrity founder who’s actually involved and credible

• Entry into premium skincare with a moat (Hailey’s influence)

• Template for future celebrity brand acquisitions

What Other Celebrity Founders Should Learn

If you’re a celebrity thinking about launching a brand, the Rhode playbook is right here:

1. Start with economics, not just aesthetics Don’t just make pretty products. Make products with margins that work.

2. Use your influence wisely Your platform is your unfair advantage. Don’t waste it trying to be “just another brand.”

3. Build for acquisition from day one Clean books, real profitability, and sustainable unit economics make you attractive to strategic buyers.

4. Stay involved authentically Hailey clearly uses Rhode. You can tell. That authenticity is why the 9x MER works.

5. Sweat the operational details Getting COGS to 19% and delivery to 15% requires actual work. Don’t skip this part.

Your Action Items (Yes, This Applies to You)

Even if you’re not a celebrity launching a beauty brand, these principles apply:

If you’re a creator:

• What products could you launch where your audience is your distribution?

• How can you leverage influence to achieve a 5x+ MER?

• What margins do you need to make it actually profitable?

If you’re a founder:

• What’s your “unfair advantage” equivalent to Hailey’s 50M followers?

• Could you build a business with 34% EBITDA margins in your category?

• Are you building for acquisition or building to last? (Rhode did both)

If you’re an investor:

• Which celebrity founders have both influence AND business discipline?

• What categories have space for a Rhode-style disruption?

• How do you evaluate cultural capital vs. financial capital?

The Bottom Line

E.L.F.’s transparency here is actually a gift to the entire industry.

We get to see exactly what works:

• Strong product margins (19% COGS)

• Efficient marketing (11%, 9x MER)

• Elite profitability (34% EBITDA)

• Room for improvement (17% G&A)

The big insight: Cultural capital only matters if you can convert it to business equity. Rhode figured out how to do both.

So here’s my question for you: What cultural capital do you have that you’re not converting to business value?

Maybe it’s not 50 million Instagram followers. Maybe it’s:

• Deep expertise in a niche that people trust

• A community that actually listens to you

• Access to a network others can’t reach

• A unique perspective that resonates

The Rhode playbook works at any scale you just need to know your numbers and leverage what makes you different.

Keep building,

David

---

P.S. When E.L.F. shows you the entire P&L of an acquisition, they’re not just being transparent they’re showing off. And honestly? When your acquisition has a 34% EBITDA margin and 11% marketing costs, you’ve earned the right to flex. What numbers in your business are worth showing off?