Jefferies bearish on brick and mortar beauty retailers

• March 26, 2025

** Brokerage Jefferies cuts PT on CoverGirl parent Coty COTY and cosmetics retailer Ulta Beauty ULTA , says e-commerce companies are winning market share

** Cuts Coty's PT to $7 from $8; shares down as much as 1.6%

** Slashes Ulta's PT to $334 from $354; says co is losing offline retail market share to Sephora due to its more upmarket offerings, appeal to young shoppers

** Notes Amazon has been the biggest winner within beauty, taking market share from Ulta, Sally Beauty SBH and Build-A-Bear BBW

** Sees TikTok Shop to evolve into a key beauty marketplace, given its proximity to product discovery and affiliate-linked content

** However, sees makeup company Elf Beauty ELF being relatively well-positioned for shift to digital, given co-owned website, early social media adoption and minimal exposure to department stores

** Including session moves, ULTA and COTY has fallen 15% and 22% respectively, YTD