04.04.24
Even Ulta Beauty is feeling the economic and makeup malaise. After a spectacular 2023, that saw sales rise more than 18% to $10.2 billion, Ulta CEO Dave Kimbell said results for the first two months of 2024 were worse than expected.
"What we’ve seen so far is a slowdown in the total category across price points and segments," he told attendees at a JP Morgan conference in New York City. "That’s a bit earlier and a bit bigger than we thought."
Kimbell couldn't pinpoint a reason for the dropoff, but said consumer confidence has been impacted by rising credit card debt and worries about student loans. At the same time, the beauty retail landscape is becoming more competitive, with a host of deals announced during the past few years. It started in 2021 when Sephora began distribution in Kohl's. More recently, Ulta and Target teamed to put Ulta counters in more than 500 Target stores. Even Bluemercury, which is owned by Macy's, got into the act, with 30 store remodels and 30 openings. According to Kimbell's estimate, the prestige beauty business has added more than 1000 points of distribution in recent years. No wonder why Ulta is looking elsewhere for growth. Last month, Ulta signed a deal with Axo to launch stores in Mexico in 2025.
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"What we’ve seen so far is a slowdown in the total category across price points and segments," he told attendees at a JP Morgan conference in New York City. "That’s a bit earlier and a bit bigger than we thought."
Kimbell couldn't pinpoint a reason for the dropoff, but said consumer confidence has been impacted by rising credit card debt and worries about student loans. At the same time, the beauty retail landscape is becoming more competitive, with a host of deals announced during the past few years. It started in 2021 when Sephora began distribution in Kohl's. More recently, Ulta and Target teamed to put Ulta counters in more than 500 Target stores. Even Bluemercury, which is owned by Macy's, got into the act, with 30 store remodels and 30 openings. According to Kimbell's estimate, the prestige beauty business has added more than 1000 points of distribution in recent years. No wonder why Ulta is looking elsewhere for growth. Last month, Ulta signed a deal with Axo to launch stores in Mexico in 2025.
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