e.l.f. Beauty to Roll Back Some Tariff Price Increases

e.l.f. Beauty is planning to walk back some of the tariff-fueled price increases it implemented less than a year ago after the retailer has seen a slide in demand that’s ramped up in recent months as consumers contend with higher gas prices. The beauty brand tested a $4 price reduction on its $18 Halo Glow skin tint and saw a nearly 40 percent lift in the business, which signaled to the company just how “sensitive” consumers are on pricing right now. Therefore, e.l.f. Beauty plans to test additional price reductions on certain families of products to see if that will drive unit growth. Last August, it raised prices by $1 across its entire e.l.f. assortment.

Total Retail's Take: e.l.f. Beauty has grown its business and won deep customer loyalty through its value-based pricing model. The retailer has consistently priced its products significantly cheaper than traditional mass-market and luxury beauty competitors. Yet given rising costs and the impact of tariffs, e.l.f. Beauty tested slightly rising prices in order to protect margins. The price increase saw pushback from consumers, however, leading to a significant drop-off in unit sales. Given that data and a sustained history of winning on its value-based pricing, e.l.f. Beauty has made the decision to roll back its tariff-related price increases.

“Whenever you take a price increase that’s that big, you’re going to see unit degradation, but I would say we’ve seen units drop off a bit more in the last few months as consumers have particularly been suffering with higher costs,” CEO Tarang Amin told CNBC in an interview. “So it’s one of the reasons why we want to reinforce the value proposition we have.”