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Tarang Amin is Interviewed about E.L.F. Beauty; Faizan Zaki is Interviewed about Winning the Spelling Bee; Tech CEO Warns of AI Future. Aired 9:30-10a ET

Aired May 30, 2025 - 09:30   ET

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.

[09:30:00]

KATE BOLDUAN, CNN ANCHOR: The company, if they remain in place, up to $150 million this year.

Another company that's keeping a very close eye on all of this whiplash is budget -- budget beauty giant e.l.f. Beauty. About 75 percent of its global production is sourced from China. And now this major beauty brand announced last week it is raising its prices by $1 starting August 1st because of Trump's tariffs.

A lot to discuss. Joining us right now is the CEO of e.l.f. Beauty, Tarang Amin.

Thank you very much for taking the time this morning.

So, on the price --

TARANG AMIN, CEO, E.L.F. BEAUTY: Well, thank you.

BOLDUAN: Of course.

On the price increase, this -- you announced this last week, going up by a dollar on August 1st. This week we learned a federal court halted Trump's tariffs. Then an appeals court allows -- is allowing them to continue for now. I -- remind everyone of that because I'm curious, does these developments, this whiplash, if you will, change your plans at all in terms of pricing?

AMIN: Well, right now it doesn't change our plans because our mission is to make the best of beauty accessible to every eye, lip, and face. We're known for our prestige quality cosmetics at incredible prices. And we've always been very transparent with our community. And we take a very long-term view.

So, what we did announce last week was to our entire community via social is, we're facing a lot of cost pressures with the tariffs, a lot of uncertainty. We're going to absorb most of those costs, but we're going to take our prices up a dollar.

And -- and -- and for perspective, our average prices are about $6.50 relative to legacy, mass cosmetics brands close to $10, and prestige brands over $20. So, we have an incredible value, but we want to be transparent to our community that we do have to take some pricing as part of our plan to mitigate this. And the overwhelming response was positive. People love the transparency. They love the fact that we're only taking prices up a dollar. We're not taking it up all the way to what the various scenarios of tariffs can be. And again, we're taking a very long-term view. And we have a very balanced plan. Pricing, supply chain optimization and continued business diversification.

The fastest growing part of our business is our international business. It was up 60 percent this past year, which is not subject to tariffs. So, I think like most companies, we're trying to navigate the uncertainty. And the best way we know how to do that is stay true to our mission and our values and -- and keep an eye on the (INAUDIBLE).

BOLDUAN: I think everyone appreciates transparency, cosmetics and otherwise.

A question that is an important one because it is suggested by the president himself is, why can't you either -- you either eat the tariff, as the president suggests, or can't you move your production in large part to the United States, which the president suggests is a simple solution to the tariff problem? I mean, what would that mean for e.l.f.?

AMIN: Well, I would say we have a major competitive advantage in our supply chain. We spent 20 years honing what we believe is the best supply chain in the world, in our space, where we have the best combination of quality, cost and (INAUDIBLE). So, it's not as simple as just moving it.

Now, having said that, we have a rapidly growing global business, and we have been optimizing that supply chain. So, we do have production in the U.S., in Europe, in Thailand, other markets. And we're going to continue to. With our acquisition of Rhode, we also now have production facilities in Italy and South Korea. But it's not as simple as just moving something that you've worked 20 years, particularly with our team in China, our key strategic suppliers. No one has that same level of quality and cost. And so, we want to be thoughtful with how we do that optimization. It's not as simple as just switching factories overnight. It just doesn't work that way.

So, that's, I think, the -- the challenge a lot of businesses face, that we are continually optimizing. And it doesn't have anything to do with tariffs. It has to do with having a great global supply chain that can service the global consumer demand that we see.

BOLDUAN: Absolutely. You had a strong earnings report this week, topping Wall Street's quarterly estimates. Looking ahead though, you've got Gap saying that if the tariffs remain it could cost them between $100 million to $150 million this year. And when you say, you know, e.l.f. is absorbing and eating some of the tariffs and the costs associated with it, I mean, how much could the tariffs cost e.l.f.? I mean, are you looking at a similar hit this year?

AMIN: Well, you know, it's interesting. We had an amazing year. Our fiscal '25 we delivered 28 percent sales growth, 26 percent adjusted EBITDA growth, grew market share over 190 basis points. It was our 25th consecutive quarter of net sales and market share gains. So, we are operating from a position of strength.

But even with that strength, we were not able to provide guidance because there's so many scenarios right now on tariffs.

[09:35:03]

Like, well, what guidance would we give? If -- if they stay at the current level, that goes through mid-August, it's one number. If it goes right back up to 170 percent for us, that's a very different number. So, I think that's the main thing.

We're hoping for a long-term resolution here. So, we can actually issue guidance. We can actually talk about it. But we're very bullish on our business.

BOLDUAN: Yes.

AMIN: We continue to grow market share. We continue to expand our business globally. So, we -- we love everything else, we just wish there was a little bit more certainty on the tariff environment.

BOLDUAN: Just real quick on this, is it the uncertainty or the actual number of tariff that's worse for you guys?

AMIN: Well, you know, I think it's both. They go hand in hand. It's one thing, like, you know, I -- I never thought I'd be happy having 55 percent tariffs. If you told me that a year ago, I'd be like, oh, my God, you're crazy. What -- that is a ridiculous number. But 55 percent is better than 170 percent. So, I think that's a -- that's a state that a lot of businesses are in right now is, we're just trying to -- we're just trying to get to a level playing field where we can actually plan and execute our business.

And so, that's one of the reasons why we continue to take a long-term view. Like, I always say, you can't fight insanity -- insanity. Let's have the right plan. Let's make sure were preserving value for the American consumer. We absolutely are committed to that. And our community appreciates for -- us for that. That's why we grow so much market share. That, along with our powerhouse innovation and our disruptive marketing engine have been key drivers for us. So, that's what we're going to stay focused on. And we -- we can't really deal with what we -- we don't know is coming. So, we're going to continue to march forward with the best we have (ph).

BOLDUAN: You made a big announcement yesterday. e.l.f. Beauty will acquire Rhode, Hailey Bieber's beauty company, for about $1 billion. "The New York Times" described it as "an eye-popping sum for a line of blushes and lip glosses that -- that's not yet three years old."

What does her brand give e.l.f. that you couldn't get otherwise, or for less?

AMIN: Well, I think what we love about Rhode and what Hailey Bieber and her team have created is another -- they are just a kindred spirit. A like-minded disrupter. We've been disrupting the beauty industry for 21 years. We're finding -- founded selling cosmetics over the internet for $1. Everyone thought we were crazy, and we've continued to disrupt even as we've migrated prices and channels.

And Hailey's done the exact same thing. They've gone from zero -- from zero to $212 million of net sales in three years, direct to consumer only, with only ten products. She's an absolute disruptor. The products are amazing. The team is amazing. And we see tons of potential.

In fact, Sephora is also admiring the brand and they're going to take the brand in all U.S. and Canadian doors this fall, followed by the U.K. by the end of the year. So, I think the -- the best thing about this acquisition is it absolutely meets our mission of being a different kind of beauty company, by building brands that disrupt norms, shape -- shape culture and connect communities. And so I couldn't be more excited to welcome Rhode into the e.l.f. Beauty family of brands.

BOLDUAN: I mean it is -- it's a big one. Also, when you're talking about you doing things differently, you've -- you have been in the headlines recently also for airdropping a care package to Oliver Widger, the viral sensation who quit his job and, I think, drained his 401k to plan to spend the rest of his life sailing around the world with his cat. The cat becoming the star of the show. Your team sent an airdropped sunscreen for him, treats for the cat while he was on his way to Hawaii, and he kind of has unveiled it to all of his followers.

What does this represent for e.l.f., other than the guy's got a lot of eyeballs on him and he's talking e.l.f. products?

AMIN: Well, as I said, we're known for our disruptive marketing engine. And a key part of that is how we engage, entertain our community. And so, we love Oliver and Phoenix's story. And so it very much ties into our ethos of empowering others and really serving the underdog. We -- we absolutely love this story. It was our pleasure to actually do the airdrop and, you know, you -- and stay tuned. You're going to see more between e.l.f. and Oliver and -- and Phoenix and -- but it's just what we're known for. We're known -- the reason why we're the number one brand amongst gen z, three and a half times the number two brand, why we're the most purchased amongst gen alpha and millennials is, we know how to engage and entertain our community.

And I got to tell you, I can't tell you how many million connections, impressions we had through this activation. And -- because it hit a chord. I think, you know, the reason the world was mesmerized by this is everyone was inspired. Here was a guy who didn't like his job and decided, look, I'm going to do something with my life, and I'm going to -- I'm going to follow my dreams. And there's nothing that makes us happier than helping people pursue their dreams.

[09:40:05]

BOLDUAN: I will definitely be sending you my coordinates the next beach vacation I am on so we can coordinate another airdrop.

Tarang Amin, CEO of e.l.f. Beauty. Thank you so much for coming on this morning.

Coming up --

AMIN: Well, thank you for having me.

BOLDUAN: Of course.

Coming up for us still, a 13-year-old from Texas has been crowned America's top speller. He's going to be joining us next to talk about his big win after an even bigger comeback.

(COMMERCIAL BREAK)

JOHN BERMAN, CNN ANCHOR: There is a new National Spelling Bee champion, 13-year-old Faizan Zaki from Texas.

[09:45:00]

Now he was the runner up last year, but runner up no more.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: Eclaircissement.

FAIZAN ZAKI, 2025 SCRIPPS NATIONAL SPELLING BEE CHAMPION: Eclaircissement.

E-c-l-a-i-r-c-i-s-s-e-m-e-n-t. Eclaircissement.

UNIDENTIFIED FEMALE: That is correct.

UNIDENTIFIED MALE: Faizan Zaki, you are the 2025 Scripps National Spelling Bee champion.

(END VIDEO CLIP)

BERMAN: So that word that he spelled fittingly means clearing up of something obscure.

And with us now is the spelling champ himself, Faizan Zaki.

Congratulations to you.

We've watched that video all morning long of you spelling the winning word there. And each time I'm struck by the fact with like five letters to go you started celebrating.

KATE BOLDUAN, CNN ANCHOR: Right.

BERMAN: So, walk me through what was going on in your head as you were still shouting out letters, but you know you'd won the championship.

FAIZAN ZAKI, 2025 SCRIPPS NATIONAL SPELLING BEE CHAMPION: So, it all started when I heard -- when Dr. Bailey (ph) gave me the word. I -- I immediately recognized it. And I knew the definition and that it was from French. So, I just went for it. I started spelling. And then I just got really excited at the end there and I started like -- like -- like -- like struggling to breathe and stuff. So, yes, it was definitely exciting.

BOLDUAN: Faizan, how do you describe that -- this moment for you because, again, as John said, you were runner up last year. And coming back to this, that's, I don't know, additional pressure, additional lots of things I'm sure it felt for you. What are -- what are you feeling right now?

ZAKI: I'm just -- I'm just relieved because I know there -- there were a lot of expectations for me to -- to win since I did get second place last year. But I'm also -- I'm also just really excited that I, like, won finally. So, it's been a seven-year long journey. So, I'm -- I'm glad that it finally gets to come to a close.

BERMAN: You've had seven years to dream of it. How does it compare? How does this moment compare to your dreams?

ZAKI: Yes.

It's just, like, for the past -- I feel like it's been a month that I've been nervous now. And now I just feel so relieved. And I'm so excited to, like, I'm so excited that I have this trophy right here with me. So, I'm just really ecstatic. So, yes.

BOLDUAN: I read in "USA Today" that there is -- in the -- in the round before the final round you -- there -- there -- there was a word that the other two competitors did not spell correctly and you had the opportunity then to clinch it and you did not. You -- you -- oh, you want to --

BERMAN: Yes, I think we have that.

BOLDUAN: Oh, OK.

BERMAN: Carmelina. Is this the carmelina moment? Let's play it.

BOLDUAN: This is the carmelina moment.

BERMAN: Let's play what will forever be known as carmelina-gate.

ZAKI: Yes.

BERMAN: Let's play that.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: Hi, Faizan.

ZAKI: Hello.

UNIDENTIFIED MALE: Carmelina.

ZAKI: K-a-m -- oh, OK. Let me think. Let me think. All the information.

UNIDENTIFIED MALE: Oh, boy.

Carmelina, carmelina.

ZAKI: Oh, shoot. OK.

(END VIDEO CLIP)

BOLDUAN: After that your mother told "USA Today" that you gave them a brief heart attack. So, one, how is your mom feeling this morning? And what happened in that moment?

ZAKI: So, I mean, now she's feeling better. But I -- I remember she -- she was like -- she was -- she was like very annoyed at me after the bee. So, yes, I'm glad she's better now, though.

BERMAN: What's so funny is you are like literally right now the best speller on planet earth, yet what that moment was, was something we all -- all of us who can't spell and can't do anything fall victim to was that just you got to be a little patient, right? What -- what was the lesson -- what was the lesson you learned from -- from jumping the gun on that word?

ZAKI: Definitely to, like, I learned that I need to slow down. That's what I did with eclaircissement. I, obviously, I went straight into it, but I, like -- I, like, slowed myself down and, like, composed myself and, like, spelled slowly instead of just rushing, k-a-m, like I did with carmelina.

BOLDUAN: Well, you can spell as fast as you -- your heart desires from here on out, because you now have the title of the spelling bee champion.

ZAKI: Yes.

BOLDUAN: After so much hard work. Hours and hours, I was reading, he spent in preparing and studying during the week and on the weekends for this huge accomplishment.

Congratulations, Faizan! Thank you for waking up to join us today.

ZAKI: Yes, for sure. Thank you for having me.

BERMAN: You're the champ, man. Enjoy it.

BOLDUAN: We should end it right there.

BERMAN: Yes.

BOLDUAN: But I'm going to tease to this.

BERMAN: Let's tease to this.

BOLDUAN: Let's tease to this. AI could cause a white-collar jobs bloodbath. That is the bold

prediction from a top tech CEO about the technology he's spearheading. Just like Kate, bring it on down real quick.

BERMAN: Oh, that's -- there we go.

BOLDUAN: There's uplifting. Kate. Yes, we'll be back.

(COMMERCIAL BREAK)

[09:54:23]

BOLDUAN: A warning from the CEO of one of the world's leading artificial intelligence labs. Dario Amodei says AI is starting to outpace humans at almost all intellectual tasks. And that rapid advancement could wipe out thousands of jobs.

CNN's Clare Duffy joins us live now with more on this.

As we were talking about, the messenger is almost as important and news making as the message.

CLARE DUFFY, CNN BUSINESS WRITER: Yes, we've heard these kinds of warnings from academics, from economists, but this is the CEO of Anthropic. This is one of the top AI labs. It's in the same league as OpenAI and Google. So, that is part of why this is getting so much attention.

But I think it's also getting a lot of attention because of the types of jobs he's warning that AI could take, half of all entry level white-collar jobs.

[09:55:07]

Things like paralegals, financial advisers, consultants, coders. These are jobs where if AI takes those human jobs, it is going to be harder to retrain humans to find jobs that are going to pay them the same amount of money.

Now, I think it is worth noting that this is coming, of course, from somebody who is selling the very technology that he says is going to replace human jobs. Anthropic just released a new AI model that it says can work seven hours almost uninterrupted with very little human input on really complex tasks. So, I think that there is some skepticism about whether this is truly a warning from someone who clearly is in a position to know the possibilities and the capability of this technology, or if he's really trying to say, buy my technology, this is how powerful it is.

BERMAN: Work seven hours without a break. They need a better union. The AI -- the artificial intelligence, you know, needs to organize.

DUFFY: These AI employees that are going to replace us. Maybe they will.

BOLDUAN: Well, exactly. Give them a week and they'll learn how -- they'll learn how to do it.

BERMAN: Give them a week and they'll learn how to organize.

BOLDUAN: It's great to see you, Clare.

DUFFY: Thank you.

BOLDUAN: Thank you.

BERMAN: What was your entry level -- you first job out of college?

BOLDUAN: Working as a desk assistant at "NBC Nightly News."

BERMAN: Mine was ABC News. I don't think anyone could replace the coffee that I made.

BOLDUAN: Or the printer paper I replaced.

BERMAN: Yes. AI, good luck on that, pal.

BOLDUAN: Take my job.

BERMAN: Thank you all for joining us. This has been CNN NEWS CENTRAL. "THE SITUATION ROOM" up next.

(COMMERCIAL BREAK)