“股神”巴菲特去年建仓的 On Friday, many "Cosmetic and Beauty" Stocks in the U.S. stock market saw significant declines, with Ulta Beauty, which Buffett invested in last year, dropping by 6.68%; a major reason for Ulta Beauty's drop is due to the poor performance of its peer e.l.f. Beauty, which reported nearly a 36% year-on-year decline in profits last quarter and lowered its expectations for 2025.
According to the Financial Association on February 8 (Editor Zhao Hao), on Friday (February 7), several "Cosmetic and Beauty" Stocks in the US stock market experienced significant declines.
At the close, $e.l.f. Beauty (ELF.US)$ Down 19.62%,$Sally Beauty Holdings (SBH.US)$Down 6.33%.
"Stock God" Buffett had built positions last year. $Ulta Beauty (ULTA.US)$ It fell by 6.68%, closing at the lowest level since November 27, 2024.
This week, e.l.f. Beauty and Sally Beauty's stock prices dropped by 28.81% and 10.21% respectively, while Ulta Beauty fell by 9.06%.
It is understood that Ulta Beauty, founded in 1990, is the largest specialty beauty product retailer in the USA, with 1,437 stores across 50 states.
Last year in the second quarter, Berkshire Hathaway, under Buffett, began a position in Ulta Beauty, buying over 0.69 million shares with a Market Cap of about 0.266 billion USD, making it the 30th position in Berkshire's Hold Positions.
At that time, the market also analyzed that Buffett might have seen the reasonable valuation of Ulta Beauty and the huge potential of the USA's beauty market, even suggesting that the 'Oracle of Omaha' was preparing for the 'Lipstick Effect' in the USA.
The 'Lipstick Effect' is an economic phenomenon indicating that during economic downturns or recessions, lipstick sales tend to increase.
However, just as the market anticipated a strengthening beauty Industry, Berkshire reduced its Shareholding in nearly 97% of its Ulta Beauty Stocks in the third quarter of last year, leaving only 0.024 million shares.
ULTA Beauty stock price monthly chart
Based on ULTA Beauty stock price trends in the second and third quarters of last year, Berkshire is likely to incur losses on this stock.
Focusing on this week, the decline in ULTA Beauty is largely due to the performance drag from its peer e.l.f. Beauty.
The report shows that e.l.f. Beauty's profit in the fourth quarter of last year fell by nearly 36% year-on-year, and the company also lowered its expectations for 2025, stating, "Given the trend is weaker than expected, we are taking a cautious approach."
e.l.f. Beauty CEO Tarang Amin told the media that the Cosmetic Industry overall declined by 5% in January of this year, attributing this to Consumer spending brought forward due to holiday discounts at the end of last year, as well as a decline in 'attention' to beauty products online.
Amin explained on the Earnings Reports conference call that TikTok's operational crisis in the USA and the devastating wildfires in the Los Angeles area led to a decline in discussions about beauty Topics on Social Media. A large portion of e.l.f. Beauty's sales relies on online channels.
According to reports from software company Dash Hudson and Chicago market research company NielsenIQ, as of February 2024, TikTok Shop is the ninth largest online retailer in the beauty Industry in the USA.
Amin stated, "In January, Consumer attention was focused elsewhere, such as the wildfires in Los Angeles and the uncertainty surrounding the TikTok platform. The only content people posted on TikTok was about whether the platform would continue to operate or shut down."
Editor/Rocky
