Breakfast News: Rhode Results Rattle e.l.f.

Breakfast News: Rhode Results Rattle e.l.f.

1. e.l.f. Disappoints With Rhode Update

e.l.f. Beauty (ELF 1.01%) closed almost 7% lower after the business released the first financial update regarding the purchase of Hailey Bieber's Rhode brand, which showed underwhelming revenue growth.

• Sales for the quarter ended in June at $40.2 million below the expected run rate: Rhode's previously reported annual sales for the latest full year were $212 million, so the latest figures didn't excite investors. However, the brand's 33% operating margin vastly exceeds e.l.f. at 19%.
• "e.l.f.'s brand remains ascendant in the cosmetics and skincare industry": Fool analyst Tim Green pointed out that "e.l.f. is going through a rough patch, but we're confident that better days are ahead."

2. PYPL Eyes Europe E-Commerce Growth

Bloomberg reports that PayPal (PYPL 1.30%) is increasing its stake in German digital commerce company Shopware, as it looks to further build on international expansion.

• "This reflects our...commitment to supporting the growth of digital commerce in Europe": A PayPal spokesperson didn't confirm the transaction details, after the company initially invested $100 million along with Carlyle (CG 0.20%) back in 2022 but is now reportedly increasing the stake from 11% to 41%.
• Germany offers a key e-commerce gateway: Shopware is the most widely used shop system in Germany, with the marketplace being the largest in the European Union, representing an area of growth for PayPal.

3. Trump Agrees on Australian Rare-Earths Deal

President Donald Trump signed a landmark deal with Australian Prime Minister Anthony Albanese to increase U.S. access to rare earths and minerals, easing pressure from the existing Chinese export curbs on the materials.

• "In about a year from now, we'll have so much critical mineral and rare earths that you won't know what to do with them": Trump detailed how the joint investment in Australian mines will enhance production significantly, benefiting a wide range of sectors, ranging from electric vehicles (EVs) to semiconductors.
• Indirectly reducing trade tensions with China: Both countries pledged to protect their domestic markets from unfair trade practices, a thinly veiled nod to China, the largest producer globally.

4. NFLX Reports Alongside TXN, MMM, and GE

Netflix (NFLX 0.30%) is set to report after the market closes, as is Texas Instruments (TXN 0.77%), with the latter under scrutiny due to the semiconductor exposure to China.

• Beating earnings estimates for the past four quarters: 3M (MMM 5.24%) should release earnings before the market opens, aiming to build on a strong previous quarter, with a focus on whether management will be divesting parts of the industrial division.
• More information on tariff mitigation expected: GE Aerospace (GE 1.64%) is slated to put out quarterly results before the opening bell, with profit due to grow, thanks in part to strong demand for spare parts.

5. Your Take

Netflix is up 99.08% over the last five years. Across the same period, the S&P 500 is up 94.35%. But will Netflix be a market-beater over the next five years? Debate with friends and family, or become a member to hear what your fellow Fools are saying.