The news: E.l.f. Beauty is set to acquire Hailey Bieber’s brand Rhode for up to $1 billion, its largest acquisition ever, as it tries to reignite growth.

The rationale: While e.l.f. has managed a remarkable run of 25 straight quarters of growth, that momentum is becoming hard to sustain as uncertainty and tariffs dampen consumer sentiment and raise operating costs. Sales rose just 4% YoY in e.l.f.’s most recent quarter, a sharp comedown from the 31% growth it notched in the previous period.

Acquiring Rhode could change that trajectory. After just three years, the brand is already pulling in $212 million in annual revenues—despite having a grand total of 10 products in its lineup and no physical retail presence. Its upcoming launch in Sephora’s US, Canada, and UK stores could supercharge that growth by boosting brand awareness and enabling more shoppers to get their hands on Rhode’s viral lip tints.

There are other upsides to the deal. Buying Rhode deepens e.l.f.’s presence in skincare and allows it to attract a more affluent customer, one who may be more resilient amid uncertainty. The acquisition also strengthens the company’s position among younger consumers, who are avid—but fickle—beauty spenders.

Our take: E.l.f. and Rhode are a good match. Both companies are highly marketing-savvy, with an ability to jump on—or even create—trends that go viral on social media. Rhode’s higher price point gives e.l.f. entry into more exclusive beauty retailers like Sephora, while e.l.f.’s manufacturing capabilities will help Rhode expand its wholesale presence.

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