CONSUMERS will soon see more of Ulta Beauty, as the popular cosmetics retailer plans to expand through the end of the year.
CEO Kecia Steelman detailed the store opening plans not long after it was revealed that its collaboration with Target would be ending.
Ulta Beauty is growing over the next couple of years (stock image)[/caption]
The expansion comes amid the end of its relationship with Target (stock image)[/caption]
“Our plan is 63 net new stores this year and that includes our Space NK stores…” Steelman explained on a Thursday earnings call.
She also noted that Ulta would continue growing on a consistent basis over the next few years.
“We are now targeting 50 to 56 new stores a year over the next two to three years…we feel very comfortable with the 50 to 56 range going forward,” the CEO added.
Steelman noted that opening rates could vary though depending on market conditions, and the business decisions would be “very thoughtfully” made to ensure Ulta is “investing our capital and expense dollars in the right way for our return.”
Ulta has yet to confirm exactly where the rest of the 63 stores for 2025 will be located.
The store opening confirmation from Steelman comes only days after it was announced that Target and Ulta would be parting ways, first reported by The Wall Street Journal.
Both companies mutually agreed to not renew their affiliation agreement, and it will officially cease in August 2026.
That means shoppers still have time to get the latest in personal care and makeup at one of the 1,000 square-foot sections within 600 Target locations around the country.
After the partnership ends, however, it’s likely that those Ulta sections inside Target will be no more.
Steelman also spoke out on the move in the earnings call, noting that it would make way for Ulta customers to stay close to home.
“We’ve achieved a lot together, and we remain committed to supporting the shopping experience for guests through the end of the partnership as well as continuing to support our teams and partners during the transition,” the CEO said.
“I think there’s going to be a huge upside potential opportunity for us to really recapture those guests back into the Ulta Beauty ecosystem and keep them whole here.”
She also added that the royalty revenue Ulta obtained from its Target partnership in 2024 was “well below 1% of net sales.”
Based on Steelman’s comments, the partnership wasn’t as profitable as the company may have expected.
What is Target Circle 360?
In April, Target launched its first-ever paid membership program, Target Circle 360.
For $99 a year, members get access to the following perks:
- Unlimited, free same-day delivery on orders over $35
- An extra 30 days to return your items
- Free two-day shipping on 100,000s of items
- 5% off in-store and online
- Automatic deals and exclusive partner perks
Target has also been making and navigating some significant changes throughout this year.
NEW LEADERSHIP
It recently found its new CEO in their current chief operating officer, Michael Fiddelke, who will take over for Brian Cornell in February.
Cornell was at the helm for 11 years after taking over in 2014.
Target is looking to get out of a sales slump, as for the past 10 fiscal quarters, the company has reported either stagnant or declining same-store sales, according to WSJ.
Additionally, a companywide survey conducted in June revealed that around 50% of employees at the retailer didn’t think it was making the necessary decisions to compete in the market.
The CEO switch-up also comes a few months after boycotts sparked in January when Target confirmed it would be rolling back some of its diversity, equity, and inclusion (DEI) initiatives.
A memo sent to staff noted that Target’s three-year DEI goals would end, along with reports to external companies like the Human Rights Campaign’s Corporate Equality Index, per CNBC.
This was on top of the ending of a program designed to help Target carry more merchandise from Black or minority-owned businesses.
PRICING PAINS
Even more controversy was sparked at the end of July when Target said it would be changing its price match guarantee program.
“Since most price matches happen within Target, we’re adjusting our price match policy to exclusively match our in-store, app and Target.com,” a separate memo read.
Executives also promised to continue providing value to customers, noting the change would make the shopping experience more efficient.
Still, some longtime Target customers fumed in a thread on Reddit that this was “the beginning of the end” for the retailer.
Target recently dropped its Halloween lineup, which includes over 1,500 items at competitive prices.
A special clearance trick could also still help shoppers get up to 70% discounts at the the retailer.
