Ulta Beauty makes major store change amid breakup with Target

Sat, Sep 6, 2025, 12:17 PM 4 min read

Ulta Beauty (ULTA) is one of the most prominent players in the beauty retail industry, but a recent decision may impact consumer demand.

Recently, the retailer saw a surge in sales. In Ulta’s second-quarter earnings report for 2025, it revealed that its comparable sales increased 6.7% year-over-year as it saw a 3.7% increase in customer transactions.

Also, the amount of money customers spent per purchase spiked by almost 3%.

Related: Target stores will soon undergo big changes as shoppers pull back

Despite a boost in sales, recent data from Placer.ai found that Ulta’s foot traffic at same-store locations declined by 1.1% during the quarter. Specifically, same-store visits dropped in June and July by 4.6% and 5.4%, respectively.

In addition to waning foot traffic in stores, last month, Ulta and Target (TGT) announced that they mutually agreed to end their five-year-long partnership in August 2026. The partnership involved adding Ulta shop-in-shops in hundreds of Target stores.

The news came after several Target employees took to Reddit to claim that the Ulta shops attracted theft and suffered from understaffing as they generated high foot traffic. One Ulta shop-in-shop location reportedly was losing $10,000 a month due to retail theft.

During an earnings call on Aug. 28, Ulta Beauty CEO Kecia Steelman said that royalty revenue from Ulta’s partnership with Target in fiscal 2024 was “well below 1% of net sales.”

“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,” said Steelman.

In the meantime, she said Ulta will look for new ways to “maximize key growth opportunities in beauty and wellness,” especially as consumers grow more cautious about their spending amid heightened concerns about the impact tariffs will have on prices for everyday goods.

“Our insight suggests consumers continue to prudently manage their day-to-day spending and are watchful of pricing trends in response to tariffs,” said Steelman. “At the same time, beauty enthusiasts tell us that they’re prioritizing their beauty regimens and remain strongly engaged within the category. While we continue to manage the business thoughtfully amid ongoing macroeconomic uncertainty, we believe beauty and wellness offer a unique sense of comfort and escape, which we expect will continue to support the beauty category resilience.”

To boost sales, Ulta is planning to expand its wellness section in its stores. The section, which first launched in 2023, sells products such as supplements, bath and body care, sleep aids, etc.