Ulta Beauty's 200 stores opening over next 3 years to include at least 2 on Long Island

Cosmetics retailer Ulta Beauty’s plan to open 200 stores over the next three years includes at least two more stores on Long Island, despite a slowdown in overall beauty sales.

The nation’s largest specialty beauty chain, Ulta plans to open stores in Oceanside and Selden next spring or summer, the Bolingbrook, Illinois-based company said Wednesday.

The Ulta in Oceanside, which will be located at 3203 Long Beach Rd. in Oceanside Plaza, will occupy 7,500 square feet of the 12,000-square-foot space that Rite Aid vacated, said Robert Goldfeder, director of leasing at Basser Kaufman, the Woodmere-based real estate company that owns the shopping center.

The Selden store, which will be located on Middle Country Road in College Plaza, will occupy 7,662 square feet.

Founded in 1990, Ulta Beauty Inc. has 1,411 stores nationwide. Its 15 stores on Long Island include one that opened in West Babylon in August.

U.S. beauty sales overall are still strong but slowing down.

Nationwide, sales of prestige, or high-end, beauty products grew 8% in the first half of 2024 compared to the same six-month period in 2023, according to Circana, a Chicago-based market research firm. In the first six months of last year, sales were up 15%, the company reported.

Sales of mid- and lower-tier beauty products were flat in the first half of this year, compared to 9% growth in the period last year.

Ulta has been challenged by not only the overall slowdown, but also growing competition from Sephora, Amazon and other retailers.

Ulta’s sales online and at its stores open at least 14 months declined 1.2% in the fiscal second quarter that ended Aug. 3, compared to an 8% increase in the same period last year.

The retailer’s sales decline can be attributed to several factors, including growth normalizing after the unprecedented boom during the COVID-19 pandemic and more competition over the last three years in the retail beauty industry, particularly among sellers of prestige products, CEO Dave Kimbell told analysts during an earnings call in August.

"Additionally, consumer behavior is starting to shift as consumers increasingly focus on value and become more cautious with their spending," he said.

In October during its Investors' Day, Ulta announced new strategies to drive growth, including opening 200 new stores over three years.

The pace is quicker than it was over the past few years, when the company had been opening about 50 stores annually, but slower than in the 2012-18 period, when Ulta was opening about 100 stores a year, said David Swartz, senior equity analyst at Morningstar Research Services LLC, a financial services firm in Chicago.

Ulta’s planned growth strategies include increasing the number of members in its loyalty program from 44 million to 50 million by 2028, expanding its assortment of wellness products and diversifying its product assortment.

The company also is expanding its number of Ulta Beauty at Target stores, where it has more than 540 and is on track to hit 800, Ulta President Kecia Steelman said during the call with analysts in August.

Ulta, whose stores average about 10,000 square feet, also plans to open smaller stores to allow more flexibility with real estate.

Ulta, Sephora and Amazon, as well as more beauty brands selling directly to consumers, have been taking a growing share of beauty sales from department stores, such as Nordstrom and Macy’s, for years, Swartz said.

But now Ulta is facing more competition.

For one thing, for 16 years until 2022, Sephora had stores inside JCPenney, a department store chain that was more concentrated in shopping malls, Swartz said. But Sephora’s partnership with Kohl’s — announced in 2020 — hurt Ulta more because Kohl’s and Ulta are often located in shopping centers together or nearby, he said.

Sephora is now in 1,050 of Kohl’s 1,176 stores nationwide.

By Tory N. Parrish

tory.parrish@newsday.comToryParrish1

Tory N. Parrish covers retail and small business for Newsday. She has worked at the Pittsburgh Tribune-Review and Observer-Dispatch in Utica, N.Y.