Beauty Defies Target's Sales Downturn [UPDATE 2]

Target consumers are clamoring for celebrity beauty brands, per a recent earnings call.
Target consumers are clamoring for celebrity beauty brands, per a recent earnings call.
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Update (May 22, 2024): Don't let Target's challenged Q1 fiscal 2024 comparable sales fool you: beauty is still going strong.

While the retailer's comparable sales were down 3.7%, beauty held strong.

"Amidst the pressure, beauty continues to be a standout category, delivering growth in the low single digits in the quarter," said Christina Hennington, Target's executive vice president, chief growth officer.

Hennington added, "This growth was led by continued strength in Ulta Beauty at Target as well as strong performance in personal care and skin care categories."

Previously (March 14, 2024): As noted in our November 2023 report, beauty is a juggernaut for Target and its beauty partner, Ulta.

That trend has continued into 2024, per Target's Q4 2023 earnings call, on which executive VP and chief growth officer Christina Hennington noted, "we do really well with Ulta Beauty, which is premium beauty.

She continued, "And it's based on the insight that we've known for years in beauty, almost all beauty shoppers shop both [mass and prestige]. They shop mass and they start to shop premium. And for us to be able to service the guests and service all the trips in that category, we needed a solution [for growth], which allowed us
to build this partnership with Ulta, which we're really, really happy about."

Hennington concluded, "And our guest has given us a lot of freedom to say, I'll spend $600 on this item. And by the way, I don't want to spend more than $2 on my body wash. And that's fine, whatever works for them."

The executive revealed that customers are also seeking celebrity brands: "That's why we partnered with Ashley Tisdale, on her exclusive to Target launch of Being Frenshe, a line of personal care products powered by mood boosting scents and self-care rituals. It's also why we've recently added Lemme, Kourtney Kardashian Barker's new line of vitamin and botanical supplements to our assortment. These trending brands add to the credibility we built in the beauty space and will continue to support our leadership role in these categories."

The retailer is also continuing to grow its Ulta Beauty partnership. 

Finally, Michael J. Fiddelke, Target's executive VP, COO and CFO, noted, "We plan to invest in the vast majority of our nearly 2,000 store fleet over the next 10 years ... including the addition of Ulta Beauty locations."
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