While many headlines focused on Target's sales decline and profit increase, the company's beauty results stood out most to Global Cosmetic Industry.
As seen earlier in 2023, the beauty category continues to be a top-performer for Target. In fact, Christina Hennington, Target's executive vice president, chief growth officer declared that the high-margin category "has been our strongest business year to date and for many years."
(To contrast, beauty is mentioned only once in Walmart's latest earnings call. John Furner, president and CEO of Walmart, noted, "We see the customer reaction of the new assortment, particularly, as I mentioned earlier, apparel, pets, beauty, home, a number of categories is really great.)
Despite "continued softness in discretionary categories," Target's Hennington noted that beauty remained strong.
Notably, she said, "Beauty led performance in the [third] quarter [of fiscal 2023] with comparable sales growth in the high single digits driven by strength across core beauty and our Ulta Beauty at Target offerings."
At the same time, Target is seeing an average price deceleration of 3 percentage points in the beauty, essentials, food and beverage space, reflecting a "move beyond the period of peak inflation from a year ago."
This deceleration is only expected to further bolster discretionary spending, which is likely to benefit beauty further.
As for key brands making waves, Hennington noted that the Q3 launch of Fenty Beauty by Rihanna has led the brand to become "one of our top-selling beauty brands across the chain."