elf Beauty Inc (NYSE:ELF) is stepping into haircare, its most significant category expansion since launching skincare in 2022.
Jefferies analysts see the move as a strong strategic fit, viewing the launch as “a positive addition to the company’s fall innovation cycle, supported by favorable category growth and trend alignment.”
The initial lineup spans six SKUs, including shampoo, conditioner, a treatment oil, anti-frizz spray, styling cream, and a styling wand, all priced at $10 or below. The rollout launched on TikTok on June 16, ahead of DTC and Target digital on June 24, with in-store Target distribution following on July 5.
The groundwork was already laid. Earlier this year, e.l.f. dropped two limited-edition hair styling products as a test. Both sold out within 48 hours, with 65% of sales coming from customers new to e.l.f. and 96% positive sentiment across social platforms. Approximately 77% of e.l.f.’s existing consumers have expressed interest in haircare, and the category ranked as the most requested segment on the brand’s recent TikTok Live alongside fragrance.
The US haircare market sits at approximately $19.3 billion, with the mass segment accounting for around $11.4 billion, according to analysts. Jefferies estimates that capturing just 1% of the US mass hair market would represent roughly $114 million in incremental revenue.
Euromonitor forecasts global haircare will grow approximately 24% to $173 billion by 2030, driven by GLP-1-related hair thinning, rising interest in scalp health, and what Jefferies describes as the “skinification of hair routines expanding the category’s TAM.”
Affordability as a Structural Advantage
environment. Jefferies notes that in periods of macro uncertainty, “beauty demand tends to skew toward affordable indulgences, with consumers trading down in larger discretionary categories while maintaining spend in lower-ticket segments.” The firm argues that e.l.f.’s core competitive advantages, namely speed to market, value positioning, and the ability to translate prestige trends into accessible price points, are “well-suited to capitalize on this dynamic in both core and treatment offerings.”
The haircare launch lands within e.l.f.’s broader fall innovation cycle, which the company activated in May with new lip and face SKUs.