Beauty Retailer Expands: 200 New Locations to Compete with Sephora
According to The Sun, Ulta Beauty is set to open over 200 new locations across the United States to compete directly with its main rival, Sephora. The retail giant unveiled its ambitious expansion strategy on Wednesday, with plans extending into 2026 and beyond.
Growth Expectations and Revenue Goals
Ulta Beauty aims to increase its net sales growth from 4% to 6% as a result of this expansion. The company successfully achieved its previously set goal of reaching $10 billion in revenue in 2022, just a year after establishing that target.
Store Openings and Performance
In recent years, Ulta has only opened a limited number of stores. However, the new plans involve launching approximately 200 stores over the next three years, averaging about 66 new locations per year. COO Kecia Steelman highlighted that the company’s latest store openings have been performing well, even amid tough competition from Sephora.
Focus on Customer Loyalty
Ulta also plans to expand its loyalty program, aiming to reach 50 million members by 2028. CEO Dave Kimbell discussed how the company’s target demographic has evolved, noting a significant increase in interest from younger men in beauty products, particularly in skincare, fragrance, and wellness.
Kimbell stated, “Today, more men – particularly young men – are engaging in and passionate about beauty. For younger beauty enthusiasts, it’s not just about changing their appearance; beauty is fun.”
Financial Outlook
CFO Paula Oyibo mentioned that 2024 and 2025 are expected to be transitional years as the company navigates near-term market dynamics. However, she expressed confidence in Ulta’s ability to expand its leadership position and deliver both profitable growth and substantial shareholder value.
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Addressing Cooling Demand
These expansion plans come just months after Ulta Beauty acknowledged a cooling demand from shoppers. CEO Dave Kimbell reported that consumer spending has slowed, predicting that the company’s sales would grow by only a single digit this year.
Kimbell noted, “We entered the year anticipating a moderation in the category, and while we expected some slowdown, the dip has been a bit earlier and larger than we anticipated.”
He specifically pointed out that high-end makeup and haircare products have experienced a more significant decline in consumer spending.
