The US beauty market, the largest single market in the world, is booming again. Fragrance sales soared in 2021 to achieve parity with skincare, reports NPD Group. Makeup and prestige beauty sales were also part of the upswing.
Ulta Beauty has shared in the spoils. The largest speciality chain in the US has reported sales of US$8.63 billion for its fiscal 2021 – a huge 37.9 per cent surge year-on-year.
Strong consumer confidence, the loosening of Covid-19 restrictions and government stimulus payments for part of the reported period were all major drivers of the landmark results. Ulta Beauty has revised its 2022 fiscal year forecasts to US$9.05 billion to US$9.15 billion.
During the year ended January 29th, Ulta Beauty opened 48 new stores across the US, lifting its national network to 1308 stores.
Sales in the all-important fourth quarter, including the Christmas period, rose 24.1 per cent to US$2.7 billion.
Important launches in fiscal 2021 included Olaplex, Fenty Beauty, No 1 by Chanel and Gwyneth Paltrow’s Supergoop. Ulta Beauty will also continue to expand its shop-in-shop concept in Target stores to add 250 more boutiques this year.
Haircare performed strongly in Q4 to represent 20 per cent of Ulta Beauty’s net sales as consumers focused more on hair health. Fragrance was the best performing category in the fourth quarter, accounting for 18 per cent of sales. Moisturisers and cleansers were the hero SKUs of skincare sales.
In a bid to grab a piece of the pie, Walmart has also announced a push into the fast-growing prestige beauty sector in the US. The world’s largest retailer has teamed with UK-based beauty speciality chain Space NK to roll out 600 upmarket brands in 250 of its stores and online this week. The partnership has been dubbed BeautySpaceNK.
Walmart already has a very large beauty business but its latest move competes directly with Sephora’s shop-in-shop concept stores in Kohl’s department stores and Ulta Beauty’s collaboration with Target in the US.