Warren Buffett was spot on about this much-loved beauty giant
Warren Buffett pulled the plug on his investment in a beauty retailer — just months before the company reported its first-ever market share loss.
The 94-year-old investor runs Berkshire Hathaway, which owns dozens of companies, including insurer Geico, battery maker Duracell, and restaurant chain Dairy Queen.
Berkshire poured $266 million into Ulta Beauty in the summer of 2024. Buffett clearly knew something when he abruptly sold 95 percent of his stake months later.
Ulta's latest earnings report shows a 2 percent drop in sales compared to the same period last year — marking the first time the beauty retailer has lost market share.
With around 1,300 stores across the US, Ulta has long dominated the beauty industry, partnering with high-profile brands like Rihanna's Fenty Beauty and Kim Kardashian's KKW.
But it now faces growing competition from Sephora and shifting consumer habits.
CEO Kecia Steelman, who took over in January, is focused on cutting costs and restructuring. While no layoffs have been announced, she plans to 'reduce management layers and shift resources to higher-growth areas.'
An ambitious turnaround plan has also been announced with focus on brand building, personalization, and digital acceleration.
Kim Kardashian attends a KKW Beauty launch at a ULTA Beauty location in New York City
Rihanna celebrates the launch of Fenty Beauty at Ulta Beauty in Los Angeles in March 2022
This will involve launching a marketplace on its e-commerce platform as well as expanding its digital and in-store product offerings.
The marketplace, which will launch in the second half of the year, will allow customers to become members and earn loyalty points that can be redeemed for rewards in-store.
It will also allow the company to introduce shoppers to new brands to try out before committing to a long term partnership.
'We are focusing to ensure the guest is at the center of everything we do, and we intend to move faster, invest strategically and optimize our business to achieve our long-term goals to drive profitable growth and market share,' Steelman said during the earnings call.
Ulta also plans to add more features to its app and website for a smoother shopping experience.
Buffett is known for his long-term approach to investing and often holds stakes in companies over decades.
Known as the 'Oracle of Omaha,' Buffett - who is worth $148 billion - is one of the best-known investors of all time.
As a result, other investors - big and small - closely watch his moves for clues.
Buffett invested $266 million into Ulta Beauty in the second quarter of 2024 only to sell 95 percent of his stake in the next quarter
Ulta Beauty currently has around 1,300 locations across the country
For example, when news broke in February that Buffett upped his stake in Sirius XM, and the share price surged 12 percent.
And when in the same month he sold a big stake in healthcare provider DaVita, the share price to sunk 11 per cent.
In February, Berkshire drew attention for turning its sights away from the turbulent US and towards Japan.
The investment giant announced on Monday that it has upped its stakes in the five biggest Japanese trading houses.
It comes amid stock market turbulence in the US after President Trump's tariff policies tipped the S&P 500 in to correction last week.
The Federal Reserve also blamed tariffs in part for its raised forecasts for inflation announced with its decision to hold interest rates steady earlier today.
