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Miami Herald
2 days ago
- Business
- Miami Herald
Ulta Beauty issues stern warning as consumers switch gears
Like many retailers across the country, Ulta Beauty (ULTA) is navigating a tough economic environment amid inflation and the looming threat of tariffs. Despite recently seeing a small boost in sales during the first few months of this year, the beauty retailer has made a bold move, signaling that it is cautious about future customer behavior. Don't miss the move: Subscribe to TheStreet's free daily newsletter In Ulta's first-quarter earnings report for 2025, it revealed that its comparable sales increased by 2.9% year-over-year. Specifically, the number of transactions in its stores increased by 0.6%, while the average amount of money customers spent per transaction spiked by 2.3%, which was primarily driven by higher prices. Related: Ulta Beauty makes drastic decision on Target partnership Despite the boost in sales, the foot traffic in Ulta's stores declined during the quarter, according to recent data from The average number of visits customers made to each of its locations dipped by roughly 7%. Image source: Jones/Bloomberg via Getty Images During an earnings call on May 30, Ulta Beauty CEO Kecia Steelman said that fragrance sales performed the strongest during the quarter, with brands such as XO Khloé by Khloé Kardashian and Noyz performing well. Skincare and wellness sales also increased; however, hair care sales remained flat, while makeup sales "decreased slightly." "Consumer engagement with beauty remains healthy, and our insights indicate beauty and wellness remain a top priority for beauty enthusiasts who tell us that they're more willing to make tradeoffs in other discretionary areas to maintain their beauty regimens," said Steelman during the call. "At the same time, they are cautious, and value is an increasingly important priority as they navigate ongoing wallet pressures." Related: Ross Stores makes drastic decision customers will see in stores She also said many consumers are "leaning into beauty as a comfort and escape from the stress of macro uncertainty," and the company expects that this emotional connection will support the company's sales going forward. However, despite this pattern of customer behavior, she warned that customers could quickly change their tune as they navigate a tough economic environment. "While they tell us that they intend to prioritize beauty and wellness, that's what they say, but they could also do something very different depending on the environment," said Steelman. In response to this risk, Ulta has updated its sales expectations for the rest of the year. It expects its comparable sales for the year to either remain flat or increase by 1.5%. Previously, it expected its sales to increase by no more than 1%. Ulta said the updated outlook reflects expectations that its comparable store sales will either decrease by low single digits or modestly increase during the second half of the year. More Retail: Costco quietly plans to offer a convenient service for customersT-Mobile pulls the plug on generous offer, angering customersKellogg sounds alarm on unexpected shift in customer behavior "While the beauty category has historically been resilient through economic downturns, it has not been immune to consumer pressure," said Ulta Beauty Chief Financial Officer Paula Oyibo during the call. "The operating environment continues to be very dynamic, and the evolving global trade landscape has created more uncertainty related to consumer wallet pressures, especially for the second half of the year." The move from Ulta comes during a time when many consumers are worried about the impact President Donald Trump's tariffs (taxes companies pay to import goods from overseas) will have on their finances. In April, Trump imposed a 10% baseline tariff on all countries and paused reciprocal tariffs. The pause on reciprocal tariffs will end in July, and as a result, about 60 countries will see higher tariff rates. This will likely cause U.S. consumers to see inflated prices for everyday goods. Trump's tariff policy has led to uncertainty, especially since it has changed multiple times and was recently challenged in federal court. According to a recent survey from market research company Numerator, 72% of consumers are worried that tariffs will raise prices for everyday goods. Also, 85% are concerned that tariffs will impact their personal finances, while 83% will adjust their shopping behaviors to prepare for tariffs. Related: Home Depot struggles to reverse concerning customer behavior The Arena Media Brands, LLC THESTREET is a registered trademark of TheStreet, Inc.
Bloomberg
2 days ago
- Business
- Bloomberg
Stock Movers: Ulta, Gap, Costco
On this episode of Stock Movers: Listen for comprehensive cross-platform coverage of the US market close as heard on Bloomberg Television, Bloomberg Radio, and YouTube with Romaine Bostick, Scarlet Fu, Carol Massar and Jess Menton. - Ulta Beauty (ULTA) shares surged the most since 2020 after delivering first-quarter results that topped Wall Street estimates, signaling that shoppers are buying up beauty products despite growing economic concerns. Profit last quarter was $6.70 a share, the company said Thursday after markets closed, beating analyst expectations for $5.80. Comparable sales were also higher than expected. The company boosted its full-year outlook for sales and profit. The better-than-expected results bode well for the turnaround plan led by Steelman as growing economic worries push consumers to pull back spending elsewhere. The company's effort in part leans on exclusive products such as a new hair-care line from Beyoncé. - Costco (COST) shares were up after the retailer posted better than expected earnings in the third quarter, a sign that the nation's largest club chain is flexing its scale and devoted following to navigate tariffs and economic turbulence. Costco is the latest big-box retailer to post quarterly results, as investors and analysts search for clues on how shoppers are spending. Many consumer-facing companies have posted soft results in recent weeks with Target Corp., Procter & Gamble Co. and Kraft Heinz Co. slashing their annual outlooks. Walmart Inc. and a handful of names have been outliers with strong results. Sweeping, on-again, off-again US tariffs have upended operations across industries, fueling chaos among companies, investors and consumers. Courts are weighing in on whether these tariffs can stay in effect. - Gap (GAP) shares dropped nearly 21% during trading on Friday after the apparel retailer predicted a tariff impact of as much as $300 million, offsetting better-than-expected results at its biggest brands. On Thursday, Gap said tariffs could result in a $250 million to $300 million hit if they remain at current levels of 30% for most goods from China and 10% for other countries. The retailer said it has strategies to mitigate more than half of that cost. Gap reiterated its full-year guidance for sales and operating income, but added the outlook doesn't include the potential impact of any duties.
Business Insider
3 days ago
- Business
- Business Insider
Ulta says consumers are looking to beauty products for 'a comfort and escape' from the world's stress
Retail therapy has been boosting Ulta Beauty's bottom line. On Thursday's earnings call, Ulta's CEO, Kecia Steelman, said that customers are buying beauty products to cope with big-picture concerns. "Many consumers indicate that they are leaning into beauty as a comfort and escape from the stress of macro uncertainty," Steelman said. "We expect this emotional connection will support the category's resilience going forward." She said customers are also willing to give up spending on other non-essential products so they can continue buying makeup and skincare products. "At the same time, they are cautious and value is an increasingly important priority as they navigate ongoing wallet pressures," Steelman added. Her remarks echoed what retailers across fast food, toys, and fashion have said about consumers tightening their spending in the last year. Steelman added that the amount spent per customer is fairly consistent across all income groups. Other retailers and banks have reported lower-income groups pulling back their spending more. Ulta said that first-quarter revenue rose 4.5% to $2.8 billion compared to the same period last year. The cosmetics retailer beat quarterly expectations and raised its annual profit forecast. Steelman said sales were boosted by established brands such as MAC, Estee Lauder, and Lancome, and by newly launched ones such as Tatcha, Milk Makeup, and K-beauty brand Peach & Lily. Shares of the company were up about 8% in after-hours trading. Ulta is up 9% in the past year because of resilience in the beauty category. Ulta's results were a bright spot in an earnings season that was tough on US retail. Last week, Target missed first-quarter revenue estimates as transactions fell, and the retail giant cut its full-year sales outlook. The world's largest retailer posted a similar outlook earlier this month: Walmart fell short of quarterly sales estimates, as customers pulled back on spending because of tariffs. "We're wired for everyday low prices, but the magnitude of these increases is more than any retailer can absorb," Walmart's chief financial officer, John David Rainey, said in an interview with CNBC earlier this month. He added that import duties, which for China were recently slashed to 30% for 90 days, were "still too high."
Yahoo
17-04-2025
- Business
- Yahoo
EXCLUSIVE: Ulta Beauty Appoints Lauren Brindley as Chief Merchandising and Digital Officer
Ulta Beauty has appointed Lauren Brindley as its new chief merchandising and digital officer, effective June 3. Brindley, who most recently served as CEO of Revolution Beauty, previously held senior leadership roles at Walgreens and Boots UK. She succeeds Monica Arnaudo, who announced her plans to retire in November. More from WWD Is Starbucks' New Dress Code a Sign of Things to Come? EXCLUSIVE: Chanel to Open Beauty Activation at The Grove in L.A. EXCLUSIVE: Celebrity Makeup Artist Vincent Oquendo Is Launching a Beauty Talk Show 'I am truly honored to join Ulta Beauty and build upon the company's exceptional legacy of innovation and impact,' said Brindley. 'As a long-time admirer of the brand, I'm thrilled to step into this role and work alongside an incredible leadership team to help shape the next chapter of growth and continue to elevate the beauty experience for guests and partners alike.' In her new role, Brindley will oversee the company's merchandising, e-commerce, wellness and marketplace efforts, as well as assortment brand-building strategy. Digital, which used to sit under the chief marketing officer function, will also fall under Brindley's purview. Of her new hire, Ulta Beauty president and CEO Kecia Steelman said: 'Her strategic mindset, deep industry expertise and passion for beauty give me great confidence as we shape Ulta Beauty's next chapter of growth. With Lauren at the helm of our merchandising and digital strategies, we will continue building on our commitment to cultivate a world-class assortment and foster meaningful relationships with our brand partners, while inspiring new and exciting possibilities.' Since stepping into the top job in January, Steelman has been busy building out her C-suite, including naming Kelly Mahoney Ulta Beauty's new chief marketing officer, overseeing the company's brand marketing strategy, loyalty, media planning, public relations, consumer insights, and social media and influencer strategy. She succeeded Michelle Crossan-Matos, who departed in January. This comes as Steelman recently unveiled a new strategy called Ulta Beauty Unleashed, which involves securing more exclusives, optimizing digital capabilities and streamlining costs, to help the retailer compete more effectively against the likes of Amazon and Sephora. Ulta Beauty lost market share for the first time in 2024 with net sales decreasing 1.9 percent to $3.5 billion in its fourth quarter, while it delivered worse than expected earnings guidance for 2025. Since taking the reins, Steelman has moved quickly to reinvigorate the business. The company recently announced plans to launch an invite-only marketplace later this year, while it is also gearing up for its first international expansion in Mexico, before entering the Middle East. Best of WWD The Best Makeup Looks in Golden Globes History A Look Back at Golden Globes Best Makeup on the Red Carpet, From Megan Fox to Sophia Loren [PHOTOS] The Best Hairstyles in Golden Globes History
Miami Herald
09-04-2025
- Business
- Miami Herald
Ulta Beauty makes drastic decision on Target partnership
In 2020, it appeared that a marriage was made in heaven when Ulta Beaty (ULTA) and Target (TGT) announced a partnership that involves putting Ulta stores in Target locations, a concept the retailers called "shop-in-shop." By 2021, Ulta Beauty debuted in over 100 Target stores nationwide and on Target's website. By the following year, both retailers expanded their partnership by implementing this concept in 250 more Target stores and announced their goal to build towards 800 shop-in-shops over time. Don't miss the move: Subscribe to TheStreet's free daily newsletter During an earnings call in August last year, then-Ulta Beauty Chief Operating Officer Kecia Steelman said that the company's partnership with Target is "driving growth" and is still on track to reach that goal of expanding to over 800 Target stores. Related: Target makes controversial move to dodge high tariff costs "I think it's also really key that nearly 4 million guests have linked their Ulta Beauty and their Target circle loyalty programs together," said Steelman. Last year, Ulta Beauty debuted at 101 new Target locations. Currently, Target operates roughly 610 Ulta shop-in-shops in its stores. Bloomberg/Getty Images Despite this recent progress, Steelman, now CEO of Ulta Beauty, has announced that the beauty retailer is pausing its goal to expand to more Target stores. "In joint partnership with Target, we've made the decision to really lean into the 600-plus stores that are open this next year and really look at 'How do we continue to drive efficiencies and leverage the learnings that we've had to really unlock value for both of us collectively together?'" said Steelman at JPMorgan's 11th Annual Retail Round Up Conference. Related: Target sounds alarm on unexpected customer behavior She said that the move will create even "greater value" for Target and Ulta Beaty and emphasized that the beauty retailer hasn't announced further plans for additional stop-in shops past 2025. Ulta Beauty's decision comes after it revealed in its fourth-quarter earnings report for 2024 that its net sales decreased by 1.9% year-over-year during the quarter, and its operating income, the company's profit after expenses, declined by about 5% year-over-year. During an earnings call last month, Ulta Beauty flagged that it is operating in a "dynamic environment" causing "incremental pressure on consumer spending." Ulta Beauty's pause on expanding into more Target stores also comes during a time when Target was in the midst of controversy after it scaled back its diversity, equity, and inclusion policies in January. As a result, Target faced a 40-day boycott from consumers in March. According to recent data from Target's foot traffic in stores last month declined by 6.5% year-over-year. More Retail: AT&T quietly issues stern warning to customersSam's Club makes a big change to a beloved membership perkGameStop announces risky move amid store closures It is also facing another boycott threat from The People's Union USA, a group that has recently organized boycotts or "economic blackouts" of large corporations nationwide, such as Amazon, Walmart, Nestlé, etc. According to the group's website, it targets large corporations that allegedly have "driven up prices, underpaid their workers, and outsourced jobs while raking in record profits." Its Target boycott is scheduled to take place June 3-9. Related: Veteran fund manager unveils eye-popping S&P 500 forecast The Arena Media Brands, LLC THESTREET is a registered trademark of TheStreet, Inc.
