Ulta Beauty is charging into 2025 under new leadership.
Announced on Monday, Dave Kimbell is stepping down as CEO three years after assuming the position and 11 years after starting his tenure at the chain, and Kecia Steelman, Ulta’s president and COO, is succeeding him in the role effective immediately and joining the board. Kimbell will continue to serve as an advisor to Ulta through June 28.
Ulta is switching up its leadership at a crucial time as the nation’s largest specialty beauty retailer contends with fierce competition from Sephora, Amazon and more and cost-conscious consumers. Same-store sales dipped 1.3% in the second quarter last year, marking the first time in four years that the company underperformed Wall Street’s expectations.
In September, Ulta initiated a turnaround plan to combat slowing demand that focuses on five key areas of its business: assortment, social relevance, digital experience, loyalty members and promotion. So far, the plan is yielding returns. Same-store sales rose slightly in the third quarter last year and are expected to have climbed modestly during the fourth quarter. Buoyed by holiday traffic, Ulta’s operating margin is forecast to land above the high end of its previously expected range of 11.6% to 12.4% of sales.
Shareholders have reacted positively to Ulta’s CEO announcement. On Tuesday, its stock rose 3.9% to $445 in after-hours trading. We were curious about the reaction of beauty industry insiders and their recommendations for how Steelman should shepherd 1,400-plus-unit beauty retailer to growth in 2025.
So, for the latest edition of our ongoing series posing questions relevant to indie beauty, we asked eight beauty and retail analysts, consultants, executives and marketers the following questions: In light of Ulta’s recent challenges, will Steelman’s approach diverge from past CEOs? What recommendations do you have for her as she attempts to turn around the retailer’s business?
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Susannah Dellinger Founder and CEO, Bright Beauty Collective Kecia Steelman’s appointment absolutely signals an opportunity for Ulta to reassess its priorities and strengthen areas where it has recently fallen behind. While her deep operational expertise certainly suggests her focus will likely include tightening store-level execution, improving employee engagement and enhancing operational efficiency, I’m most excited to see how she looks to regain an edge in innovation and relevance, particularly among younger consumers like gen alpha.
It's no secret that Sephora has excelled in creating an in-store experience that feels elevated, interactive and aligned with the social media-driven habits of gen A. Simply ask your nearest tween if they want to go on a Sephora run with you and watch their face light up versus if you ask about any other retailer.
For Ulta, investing in experiential retail such as augmented reality beauty try-ons, leaning further into engaging pop-up events, and collaborations with trending influencers and TikTok-worthy brands will be crucial for capturing the attention and hearts of this younger audience.
Additionally, Sephora’s ability to identify and scale the hottest emerging brands has set it apart. Ulta’s product assortment should reflect a similar agility, emphasizing niche, clean and innovative brands that resonate with gen alpha’s focus on self-expression, sustainability and inclusivity. We've seen them start to lean into brands like this recently with the addition of RMS Beauty and other clean beauty leaders. A stronger partnership approach with indie and mission-driven brands can help Ulta once again stand out.
Finally, Kecia has an opportunity to reimagine the loyalty program by integrating gamification and personalization to make it more compelling for younger shoppers who have Sephora loyalty reward drop dates set as actual alarm reminders on their phones.
They have come to expect value beyond points. They’re looking for community, exclusive access and in-store experiences that make them feel part of something bigger. Ulta has the door count and the floor space to "go big or go home."
With the right blend of operational excellence and innovative thinking, Kecia can position Ulta to reclaim momentum in 2025 and beyond, and I can't wait to see what she does.
- Margarita Arriagada Founder and CEO, Valde Beauty, and Former Chief Merchant, Sephora
First, acknowledge that much of what the outgoing leadership established is to be built upon as great work and was done to make Ulta a formidable retailer and great partner to the brand community. That said, the headwinds are evident and will continue. Ulta has a great opportunity to level up more than just evolve.
In general, while there are always many opportunities for retailers to pursue, the best retailers stay tightly focused on a few, bigger, better initiatives that will cut through and move the needle. Hopefully, operational excellence is non-conversation as experienced last year with the ERP overhaul hiccups that brought many brands to their knees.
It's probably clear that Ulta’s macro opportunity is to differentiate. I would challenge that this opportunity goes beyond which brands Ulta is launching or store expansion, for example, but the total experience. Ulta has been known primarily for convenience with mass/prestige in one roof and value. The evolution of Amazon and other competitive retailers’ expansions has threatened the original differentiated proposition.
A few recommendations to leverage some of Ulta’s advantage points or improve in areas of opportunity that will yield big returns:
1. Exert point of view. What will Ulta Beauty be the best at? What will they contribute to their guests and to the industry that is game changing? If it's wellness, then double or triple down. Take risks and fail fast, but take them. Be less transactional and more dynamic.
2. Build and sustain to scale new emerging brands. Build an exclusive star brand portfolio beyond what's trendy. Build brands that offer unique value, fill need gaps or create new needs.
3. Curate. Less is more. What will Ulta stand for?
4. Create in-store experiences. Ulta has the advantage of physical space. Customers are showing up for events, happenings and services.
5. Educate and improve quality and quantity of beauty advisors. The experience is not complete without the right people to educate, serve and create energy.
6. Lower dependence on promotions. Get creative on driving excitement and unique value beyond price.
Reminder: Beauty is an emotional category with the potential to change lives. Surprise and delight beyond function.
- Lara Schmoisman Founder and CEO, The Darl
Ulta’s recent challenges seem to stem from a disconnect between their target audience and the evolving customer experience. Kecia’s approach as CEO needs to prioritize reconnecting with Ulta’s core customers by deeply understanding who they are today, what they need and how they shop.
Here’s my perspective on how Ulta can realign and thrive in 2025:
Reconnect with customers in store: The leadership team should spend time in stores observing listening, and engaging directly with customers. This hands-on approach helps identify gaps in the customer journey, from product selection to the overall buying experience.
Evaluate the sales approach: Shopping at Ulta should feel like an experience, not a chore. Whether in store or online, the sales approach should be about more than transactions. It’s about creating a personalized, engaging and seamless experience that makes customers excited to return.
Ensure product-market fit: Ulta needs to take a hard look at its product offerings and ensure they align with the needs and aspirations of its audience. This includes listening to what customers are asking for and staying ahead of trends while respecting the brand's inclusivity.
Elevate the omnichannel experience: Consistency is key. Every touchpoint, whether it’s in store, on social media or on their website, should deliver a unified message while respecting the native "language" of each platform. Customers expect personalized and relevant communication, no matter where they interact with the brand.
Kecia’s role isn’t just about leading, it’s about listening and adapting. By taking a people-first approach, connecting with customers and aligning every part of Ulta’s ecosystem to their needs, she has the opportunity to rebuild trust, reignite loyalty and bring Ulta back to its full potential in 2025.
- Lisa Motzko Hamilton Co-Founder, Breakthru Beauty, and Former VP of Merchandising, Ulta Beauty
I had the honor to work with both Dave and Kecia, specifically under Dave's leadership as VP of Merchandising. Dave is a genuine leader who I am thankful I had the time to learn from in my tenure at Ulta Beauty. We had a lot of fun growing the business together. My favorite quote from Dave was, "Do we want to be the disruptor or be disrupted?"
Kecia has an extensive background from the store side, which will be influential to the future growth of Ulta Beauty. She has always led the teams to think through the consumer lens, which is especially appreciated by the store associates who are the center of the success at Ulta. I'm personally thrilled to see a primarily woman-employed company have a woman lead again who is inspiring, relatable and has a proven track record.
As retail gets more competitive and the customer expectations are higher, I am confident they will evolve the in-store experience to be more interactive, incorporating new technology. People want to experience beauty products live, and Ulta has been able to fuel that desire.
Although digital has gained share in beauty, retail can continue to thrive with unique in-store experiences and services. Winning in retail is a combination of both art and science. It's critical to have the data, however, to get ahead of the competition, you must take risks and try new things.
- Karen Hayes Founder, Indie Global Strategies
Despite the recent wobbles, it deserves to be noted that Dave Kimbell leaves Ulta with a respectable legacy, growing topline revenues 19% during his tenure, with a CAGR of 9%. Not bad for a retailer of this size and in light of recent market dynamics.
That said, there are great opportunities for Ulta in 2025 and beyond, and Kecia Steelman’s experience and track record make her a natural successor to lead the company. Her deep operational expertise positions her to address the company’s recent challenges while building on Mr. Kimbell's foundational work in omnichannel retail and loyalty programs.
As priority No. 1, optimizing store-level profitability through improved inventory management will allow for healthy growth. Steelman is also known as a champion for Ulta’s store teams and continuing to focus on talent and culture will help to improve the shopper experience.
Steelman should also focus on accelerating digital transformation across all channels, work that Mr. Kimbell had started.
I would also like to see Ulta continue to bolster its appeal for gen Z customers through compelling, exclusive brand partnerships, indie brand expansion and social commerce.
Finally, I would expect to see a thoughtful evaluation of Ulta’s store expansion strategy, extending the Target partnership and in other sustainable ways.
- Neil Saunders Managing Director of Retail, GlobalData
Given that Ulta is a very solid business, I don’t foresee major changes in strategy as Kecia takes the reins, especially so since she has been involved in setting strategy at the firm for quite a while.
That said, Ulta is now a more mature business so there will be much more focus on international growth, attracting new customer cohorts and leaning into more embryonic categories. Less growth will come from the opening of new spaces.
- Anna Vale Beauty Marketing and Communications Consultant
The sudden departure of Ulta’s CEO marks another leadership shake-up in the beauty industry. At this level, it can destabilize even the strongest brands. With Ulta’s inside succession plan, this should ease the transition for the company and its partners.
Last year, Ulta sent negative warning signals out about the slowing of the industry, and it impacted a lot of brands. Going forward, the company has the opportunity to be a beacon of the industry. The new CEO has an opportunity to redefine Ulta’s position in a rapidly evolving market.
Priority [should] be to perfect the delicate balance between mass and prestige product categories. Ulta's market share has always been anchored on its ability to offer both ends of the market and create the intersection of these categories under one roof.
The rise of “masstige” brands and the blurring of price tiers demand a more interactive approach to curation and experience. Ulta needs to create an environment where luxury feels accessible and affordable brands feel elevated. This will resonate across consumer categories looking for value and experience.
As Amazon and Walmart become more and more prominent, Ulta is well positioned to leverage its omnipresence and build loyalty across categories, doubling down on omnichannel innovation. Further digital acceleration should be a priority alongside brick-and-mortar.
Innovation and leadership will lead the company, and this opens up huge opportunities and a halo effect across the industry.
- Tatiana Ferreira Founder and CEO, HarmonIQ
Her approach will be more focused on strategic partnerships and operational excellence, areas she has deep expertise in.
Ulta has big plans to expand stores and significantly grow its loyalty program in the coming years. In order to make that happen, my advice for her and the team would be to focus on strengthening Ulta’s digital experience along with its in-store experience and loyalty programs. Another key to success will be the right strategic partnerships and diversification of product.
If you have a question you’d like Beauty Independent to ask beauty and retail experts, please send it to editor@beautyindependent.com.
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