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Ulta Beauty’s Dave Kimbell Talks the Retailer’s Keys to Success

The 32-year-old business is the 2022 WWD Honors recipient for Best-Performing Beauty Company, Large Cap.

During business school in the mid ’90s, Dave Kimbell was placed as an intern on the skin care team at Procter & Gamble. It was certainly not his first choice, but it would ultimately change the course of his career.

“You don’t really get a choice of which category you go to,” he said. “In hindsight, I’m so grateful I was in beauty for those five or six years because of the importance that plays in consumers lives.…They’re deeper relationships that we have with our guests and that learning started for me in the’90s, of beauty.”

After a lengthy period outside the beauty industry, including a stint at PepsiCo, he returned to the category in 2014, joining Ulta Beauty as chief marketing officer. He ascended through the company’s ranks, adding titles (at one point, he was president, chief merchandising and chief marketing officer), and was named chief executive officer in 2021.

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Kimbell became Ulta’s CEO after a years-long and successful expansion spearheaded by the company’s prior CEO, Mary Dillon. And even after many consecutive years of growth and the continuation of the COVID-19 pandemic, Kimbell has kept the retailer flying high, with net sales increasing 16.8 percent year-over-year to $2.3 billion in the second quarter of its fiscal year, with net income topping $295 million, making Ulta this year’s WWD recipient for Best-Performing Beauty Company, Large Cap.

“Our research suggests that the pandemic actually elevated the importance of beauty in our lives,” said Kimbell of the category’s resilience amid an uncertain economic backdrop and record high inflation.

Ulta Beauty’s NYC store in Herald Square.

“There’s a much deeper recognition that how I choose to express myself, how I bring my inner beauty to life is not just for others, not just the external, but it’s actually deeply connected to my overall sense of wellness and self-care. And that, I don’t think is going to change,” he continued. “The more long-term, sustainable driver of the category, I believe, is increased connection to overall wellness. That will only strengthen it as time goes by.”

While Leonard A. Lauder coined the “Lipstick Index” — a theory that beauty sales increase during tough economic times — and more recently Coty Inc.’s CEO Sue Nabi said the “fragrance effect” was in play, Kimbell believes it may in fact be the wellness effect.

“That’s a good way to frame it up in the sense that if you think about trade-offs in economic choices that any individual will make, if consumers are looking at beauty through the lens of self-care and wellness again, not just the superficial aspect of it but the deeper connection of how to take care of myself, that is more important and less likely to be traded off as you make economic decisions,” he added. “That that’s a really sustainable aspect of the category that makes it even more important to consumers and will allow it to ride through whatever’s ahead.”

With his bullishness on wellness, Ulta has began rolling out dedicated wellness walls in its stores, bringing together makeup, skin care, hair care and more. The retailer has also scored major brands, including Rihanna’s Fenty Beauty, which launched at Ulta earlier this year.

But it’s not just wellness that’s driving success. Beauty is performing well across the board, a switch from a few years ago, according to Kimbell, when makeup was very strong and driving a disproportionate amount of the category’s growth. “Right now what we’re seeing is well-balanced growth across hair care skin care, fragrance, bath, makeup, across price points, mass and prestige.”

Ulta has evolved its strategy to ensure it’s in front of consumers, built up digital capabilities, linked with Target for shops-in-shop and expanded into new categories and services as consumer interest migrates. But Kimbell credits the company’s success to the 45,000-person team and culture at the 32-year-old company.

“I was just at our distribution center in Fresno, California, and it is just so great to go in any of our facilities or stores and see the absolute great operational work that they do, but fueled by the recognition that the work they’re doing with making a difference in people’s lives,” he said. “And so that just is I guess, in some ways, our secret sauce that every associate in all parts of our company feels like we’re making a difference and that fuels our success.”

He believes the culture also allowed the company to navigate the pandemic, as “when you really need your culture is when you’re faced with with unexpected challenges” — at that point, it’s too late to try to fix the culture or change it in the middle of a crisis if a strong one is not already in place.

Kimbell is optimistic about the forthcoming holiday period, too, predicting that it will be “very strong” on the back of pent-up demand for holiday parties and events that were unable to take place last year due to a resurgence of COVID-19 cases.

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Ulta Beauty at Target
Ulta Beauty at Target.

In line with those expectations, Ulta recently raised its outlook for fiscal 2022. The company now expects net sales in the region of $9.65 billion to $9.75 billion, up from $9.35 billion to $9.55 billion. Diluted earnings per share are expected to be $20.70 to $21.20, up from $19.20 to $20.10.

Kimbell is well-known in the sector for his positivity, something he attributes to trying to stay grounded.

“There’s certainly challenges that we’re faced with as all of us are in our work and our lives, challenges, big and small, and so I’m not oblivious to that. But I guess what I try to do is kind of stay grounded in the idea that we’re on a great path together and this should be fun,” he said. “Beauty is a fun category. We are making a positive difference in people’s lives every day. We are creating great careers for 45,000 people across the country. So we’re doing a lot of great things. We’re having fun, we’re in a personal emotional dynamic industry. So when we get challenges those can bring stress and anxiety, but I always just try to stay rooted in the bigger picture and that just helps me stay focused on what’s ahead of us.”