Global Cosmetic Industry’s Post

In its latest fiscal year, Ulta Beauty grew its sales by 9.8%. It did so off the back of stellar 18.3% growth in the prior year. Now, to be fair, this year contains an extra week of trade. But even when this is removed, sales still rose by 8.0% Strong growth is nothing new for Ulta, since 2019 the company’s revenue is up by a whopping 51.5%. In monetary terms it has added an additional $3.8 billion of annual sales to its top line. Although the beauty category has been on fire, this is a market-beating performance. Ulta has been growing its share through a combination of new store openings and selling more from existing stores. Ulta is very good at what it does. Buyers are alert and constantly bring new products and brands to market. A popular loyalty program has been developed and is regularly enhanced. The real estate team is adept at spotting new store opportunities. Supply chain and other operations are efficiently run. And stores are well managed. This is a retailer on the front foot. Despite the strong performance, Ulta’s share price has been hit hard. Wall Street, it seems, does not like the fact that growth is slowing nor that margins are likely to be squeezed in the year ahead. To me, this underlines how unrealistic and out of touch many on Wall Street are about the realities of retail. First, it is patently obvious that Ulta – nor any retailer for that matter – can keep pushing out extremely high, market-beating growth rates. Aside from being a mathematical impossibility, retail markets have natural ebbs and flows. The beauty tide has been rising rapidly over the past few years; it is still rising but is now doing so at a slower pace. This slowdown was always obvious. Second, because beauty has been so successful it has been a category many retailers have invested in: Sephora opening more stores, including in Kohl’s; Macy’s plotting an expansion of Bluemercury; Target enhancing its own offer and Walmart doing similar; many DTC firms with high growth agendas; and so on. This has increased competition which, in a slower-growth market, means everyone has to work harder for gains, including through more promotions which can take an edge of margins. Again, this trajectory was obvious. The point here is that there is often a big disconnect between Wall Street expectations and the realities of the market. When stacked against the wider market, Ulta is performing, and will continue to perform, exceptionally well. But you wouldn’t guess that from looking at the share price! #retail #retailnews #beauty #cosmetics #Ulta

Do you agree with my guidance on how rhode skin should launch its retail strategy? Some of my advice was based on the expertise I gained while sitting on the Morphe board. Drop your comments below - I’d love to hear your thoughts!

Solid reporting today from Erica La Sala in Beauty Independent drilling into Ulta's recent earnings and specifically, its loss of market share YTD in prestige beauty. Ulta's CEO points to cannibalization from 1,000 new prestige points of sale around the country but has a clear plan to win back and fortify market share, although not much was said about the in-store experience which could be a miss. With Amazon growing it's Prestige assortment and TikTok Shop increasingly relevant, shoppers need a reason to make the trip to the store and specifically to Ulta. An important piece of that comes in the form of increased EMV, as consumers are discovering and learning about brands on social. The portfolio of brands carried also drives interest (or not) in the retailer, particularly for younger consumers. Ulta's Spark program has introduced fantastic exclusive brands to its assortment, and leaning into this -- with an assortment that is differentiated and compelling enough to make consumers choose Ulta over another channel -- will be key in winning back market share. Related, it seems to me that Ulta is not getting its fair share of mind among consumers -- Sephora's insane growth in EMV, driven by fervent consumers, the Sephora Squad and its brand partners, is a masterclass in how to generate excitement and drive shoppers to the store (thank you Erica for including my thoughts on these two points!) I 100% believe this is a blip and that Ulta can win back that market share, and Kimbell has an actionable plan to make it happen. Prestige beauty needs multiple viable channels to address the needs and wants of consumers, and Ulta is a lynchpin in that landscape.

Do all roads lead to retail success for RHODE? That's the question posed by Erica La Sala in today's Beauty Independent series "No Stupid Questions". As Hailey Bieber's beauty brand rhode skin considers its retail strategy, there is speculation around which path the brand will take: Sephora or Ulta? I weighed in, along with 8 other strategists and investors who each offered useful takeaways. No matter which road RHODE takes, it's sure to be a masterclass in marketing and GTM strategy. Karen Hayes Sarah Covill Broyd Tina Henry Bou-Saba Kara La Forgia, Esq. Chelsea Grayson Rohit Banota Paula Floyd Rich Gersten #marketingstrategy #gotomarketstrategy #retailstrategy #Sephora #Ulta #Rhode

ULTA BEAUTY SALES CLIMB 3.5% IN Q1, AS THE COMPANY IS GEARING UP FOR INTERNATIONAL EXPANSION INTO MEXICO 📈💄The Bolingbrook, Illinois-headquartered American chain of beauty stores said net sales for the quarter ended May 4 increased 3.5% to $2.7 billion compared to $2.6 billion during the previous quarter. As a result, comparable sales increased 1.6% compared to the first quarter of fiscal 2023, driven by a 1.3% increase in transactions and 0.3% increase in average ticket. During the quarter, Ulta opened 12 new stores, closed two stores, and relocated one store, ending the quarter with 1,395 stores totaling 14.6 million square feet. The company now expects annual sales of $11.5 billion to $11.6 billion, compared to $11.7 billion to $11.8 billion last year. Likewise, the comparable sales increase is now expected to be 2% to 3%, as opposed to 4% to 5% during fiscal 2023. Ulta has also announced a joint venture with Grupo Axo, a leading multi-brand retailer in Mexico and a major player in the prestige fashion and beauty sectors in its home country as well as in South American countries such as Chile, Uruguay and Peru. Ulta is scheduled to launch in Mexico in 2025.

Foot Locker’s turnaround is showing signs of life, CEO sees consumers willing to pay full price. Foot Locker on Thursday posted better-than-expected comparable sales as CEO Mary Dillon’s turnaround plan shows signs that it’s beginning to bear fruit. The former Ulta boss said average selling prices increased during the quarter, proving that consumers are willing to pay full price for the right product. The sneaker company has been working to reverse an ongoing sales slump by revamping its stores and winning back brands. $FL https://lnkd.in/eCGFnvsQ #tradeguard #receivableputoptions #arputs #receivableputs #tradereceivables #accountsreceivables

Are you a Sephora, Ulta or Bluemercury shopper? Each of these beauty retailers has its unique strengths. According to the Robin Report, Sephora offers a more European product line and excels in fragrance and makeup. Ulta, on the other hand, has a greater emphasis on hair and is extremely approachable for the average consumer. And then there's Bluemercury, the most elevated and intentional of the three. It tells a story and has an opinion, hiring beauty experts who are fixated on ingredients and product performance. Which one is your go-to for all things beauty? #Sephora #Ulta #Bluemercury #beautyretailers

A presence in off-price #retail channels, which include Marshalls, TJ Maxx, Nordstrom Rack and Saks Off 5th, has long been a sensitive subject among #beauty brands based on the fear that selling marked-down products will equate to brand equity dilution. But a peek inside some of these off-price retailers now reveals a wide and elevated assortment of products by brands including Too Faced Cosmetics, Patchology, Mario Badescu Skin Care, Inc., The Ordinary and ELEMIS. And these brands are being displayed on premium gondolas, rather than the basic display shelves of yesteryear. In this piece by Emma Sandler and Lexy Lebsack, we speak to Chris Hobson of Rare Beauty Brands, Mara Sirhal of Saks OFF 5TH, Judah Abraham of Slate Brands, and Andrew Mastrangelo of The TJX Companies, Inc.

**Maximizing Prime Day: A Strategy for Value Finds and Retail Insights** Navigating seasonal retail events can present a challenge for consumers and retailers alike, but it also unveils significant market trends and consumer preferences. Vogue's curated selection for Prime Day 2024 highlights the intersection of accessibility and luxury, showcasing discounts such as the Levi's 94 baggy jeans at $49, down from $80, and Tory Burch Patos flats now at $229 from an original $328. These select deals are not just financial boons but insights into consumer behavior, hinting at a growing demand for both essential and premium products. Such events underscore the importance for brands to strategically leverage these sales periods to expand market reach and for consumers to plan purchases wisely. How are these insights from Prime Day informing your retail strategies, and what trends have you observed in response to these curated offerings?

It's time to embrace A.I. beauty tech! By leveraging Eve V skin analyser's advanced product recommendation algorithm, we can guide consumers to the perfect skincare products and treatment plans. Let's not just spend less, but let's spend right. #BeautyTech #AIBeauty #EveV #SkinAnalyser #SkincareTech #SmartSpending