CVS Splits Retail From Healthcare as E.l.f. Sales Jump 51%

E.l.f. Beauty's second-quarter net sales jumped 51% year over year to $520.8 million, the sharpest number in a week packed with retail news. Net income grew from just under $3 million a year ago to roughly $30 million, and the company raised its fiscal year outlook, stunning some industry analysts. CEO Tarang Amin credited the results not just to low price points but to the company's innovation pipeline.

Here is what else moved, and why it matters.

Why is CVS separating retail from healthcare?

CVS Health announced this week it intends to split its healthcare business from its retail pharmacies. That forces the question: what does this change for the stores? Front-of-store sales were roughly flat at $5.2 billion in CVS Health's third quarter, reported Wednesday. That metric barely matters inside the combined company. It matters a lot if the pharmacy business stands alone.

GlobalData Managing Director Neil Saunders framed the deal bluntly. "Of course, the decision is more about how investor value can be maximized rather than because of a deep desire to give retail the attention it needs and deserves," Saunders wrote in emailed comments Wednesday. "Even so, if the split does happen, retail will have to stand on its own two feet and that means sharper execution and much more innovation." He added it will "force retail into making decisions and investments it has traditionally put off."

Saunders sees an opening in consumer health and wellness, but the new entity starts weak. "The consumer entity is the weaker part, and it will start life as a stand-alone business on the back foot," he said. CVS must build "a more compelling retail proposition that gives consumers reasons to visit beyond collecting prescriptions or making the odd necessity purchase." Emarketer senior analyst Rajiv Leventhal pointed to "the struggles of Walgreens and Rite Aid" as proof that standalone pharmacy chains face brutal economics without an insurer and pharmacy benefits manager behind them.

Who bought Coldwater Creek?

Nexus Capital Management completed its acquisition of CW Holdings, parent of Coldwater Creek and Soft Surroundings, according to a Monday press release. Both direct-to-consumer brands sell apparel and lifestyle goods to women 45 and older through e-commerce and catalogs. Nexus also owns Dollar Shave Club, Hostess Brands, FTD, Toms and 99 Cents Only Stores.

"Coldwater Creek and Soft Surroundings are brands with decades of heritage and customers who have stayed with them for years," Coldwater CEO David Walde said in a statement. "Nexus shares our belief in what makes these brands special, and with their support we will continue investing in our product, the experience we deliver for our customers and the ways we reach new ones."

What happened at Canada Goose?

Canada Goooto's second quarter brought growth and wider losses at once. Revenue rose nearly 6% year over year to CA$274 million ($195 million at press time), with DTC up 2.7% and wholesale up 4.6%. But DTC comparable sales fell 7.5%, and CEO Dani Reiss said "softer store traffic [continues] to be a headwind." Operating loss widened to CA$21.6 million from CA$17.6 million, and net loss hit CA$26.3 million versus CA$17.4 million a year ago. SG&A climbed to CA$204.5 million from CA$183.3 million.

"When customers came through the door, the response was strong," Reiss told analysts. "Conversion improved and average revenue per unit and units per transaction increased. We are encouraged by these results and are confident in our ability to build on that momentum and to return to positive comp sales growth."

A Hunger Games fragrance?

Brands like Gap and Victoria's Secret are chasing fragrance, a market Grand View Research says could approach $90 billion by 2033. Scentbird and Drift went further: on Thursday, ahead of "The Hunger Games: Sunrise on the Reaping," they launched an eau de parfum, home diffuser and car freshener inspired by Panem, "bringing the world of Panem to life." The regime's child murder is skipped in favor of its "breathtaking landscape and enduring sense of hope." Notes include wild berries, apple tree, golden daisy, butterfly moss — butterfly bush and meadow moss.

For marketers, the week's throughline is separation pressure: CVS splitting retail from care, brands splitting licensing from merchandise, and every standalone unit now proving it can earn its keep.