Remember when your friend sold their Bitcoin at $30k right before it hit $60k? Well, Warren Buffett just had one of those moments, except with makeup instead of crypto.
The Oracle of Omaha—who’s usually about as wrong as a Swiss watch—just got schooled by Ulta Beauty (NASDAQ: ULTA). And honestly? It’s kind of hilarious.
Here’s the tea: Buffett’s Berkshire Hathaway bought into Ulta in Q2 2024, then dumped it entirely by Q4. That’s roughly six months—which for Buffett is like a one-night stand. This is a guy who’s held Coca-Cola since the Reagan administration, so when he bails that fast, you know something spooked him.
But here’s where it gets spicy. Ulta just posted earnings that would make a tech bro weep with joy, and the stock rocketed 13% in a single day. The beauty retailer is now up 41% year-to-date, basically giving Buffett the financial equivalent of a “what could have been” text from an ex.
The Numbers Don’t Lie (Unlike Your Dating Profile)
Ulta’s Q3 results were absolutely bonkers:
- Net sales hit $2.86 billion—up 13% and crushing estimates of $2.72 billion
- Same-store sales jumped 6.3%, which is retail speak for “people actually want to shop here”
- They opened 28 new stores because apparently, there’s never enough places to buy $40 mascara
- Earnings per share came in at $5.14, beating expectations like a piñata at a kid’s birthday party
The real kicker? Ulta’s “Beauty Unleashed Strategy” (yes, that’s actually what they call it) is working. CEO Kecia Steelman basically did a victory lap, talking about how their “exciting assortment newness” and “bold marketing efforts” are resonating with customers. Translation: people love buying overpriced skincare, and business is booming.
The Plot Twist Nobody Saw Coming
While Buffett was probably stress-eating See’s Candies over his Ulta exit, the company was busy raising its full-year outlook. They’re now calling for $12.3 billion in net sales and bumped earnings projections to $25.20-$25.50 per share. That’s like your ex getting a glow-up right after you break up.
The best part? Analysts are now falling over themselves to raise price targets. UBS thinks it could hit $690 per share, while others are targeting $640-$650. That’s potentially 6-14% upside, which isn’t Tesla-level crazy, but it’s solid money for a company that sells lip gloss.
Look, nobody’s perfect—not even Warren Buffett. Sometimes you sell too early, sometimes you hold too long, and sometimes you just can’t figure out why people spend $200 at Sephora. But Ulta’s recent performance is a reminder that even the smartest money in the room can miss the mark.
The moral of the story? Sometimes the best investment strategy is just accepting that people will always pay premium prices to look good. Beauty might be in the eye of the beholder, but profits are in the quarterly earnings report.