Earlier today, retailers Ulta Beauty (ULTA) and Target (TGT) announced that they will end their partnership in August 2026. For context, this deal had brought Ulta mini-shops to over 600 Target stores and added some Ulta products to Target’s website. In addition, these in-store beauty sections offered a smaller, rotating mix of Ulta products and were staffed by Target employees, with the aim of bringing Ulta’s prestigious feel to more shoppers. Unfortunately, the split comes at a challenging time for Target.
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Indeed, its yearly sales haven’t grown much in the past four years, and the company expects sales to shrink this year. As a result, Target’s stock is now worth less than half of what it was in 2021, when it hit an all-time high. Interestingly, the Ulta partnership had been a key part of Target’s plan to grow its beauty category, as management often highlighted it in earnings calls and investor events. As a matter of fact, in March, CEO Brian Cornell pointed to beauty as a bright spot by noting that Target gained market share and saw nearly 7% growth in that category last year.
However, some analysts say that Target’s own problems may have played a role in ending the deal. David Bellinger of Mizuho Securities blamed messy store operations, staffing shortages, and retail theft. He sees the Ulta split as another issue for Target’s next CEO, as Cornell is expected to step down soon. Still, both companies spoke positively about their time working together. Target’s Chief Commercial Officer said that the retailer remains focused on offering great beauty deals, while Ulta’s Chief Retail Officer said that the brand will continue growing by focusing on its wide selection and in-store experiences.
Which Retail Stock Is the Better Buy?
Turning to Wall Street, out of the two stocks mentioned above, analysts think that both ULTA and TGT are trading near fair value, with a price target of $505.86 per share for the former and $103.88 for the latter.
