We're In A Trade-down Economy, And Ulta Is Winning

If you're feeling anxious about the economy, you're not alone. Consumer confidence is at its lowest in more than a decade . Americans are worried about inflation, a possible recession, and job security—and that anxiety is reshaping how they spend.

Even high earners are pulling back. Households are cutting big-ticket indulgences like vacations, fine dining, and designer fashion and redirecting spending toward essentials like groceries and personal care. Even then, they're choosing retailers that feel like smart value plays. Higher-income shoppers have increasingly frequented discount chains like Walmart and Costco—both of which have seen record-breaking quarters.

Ulta is poised to win in this economy. Since its founding in 1990, Ulta has specialized in selling mass-market beauty products, with some luxury brands sprinkled in. Walking the aisles, you'll find a $12 Maybelline foundation across from a $190 bottle of Chanel No. 5 perfume.

"We're very focused on being inclusive, and we want to be a destination for everyone," says Ulta CEO Kecia Steelman. "We can take care of your beauty shopping needs no matter what your budget is."

In a booming economy, that kind of mixing can feel unglamorous. Aspirational shoppers tend to gravitate toward retailers like Sephora or Nordstrom, where everything signals luxury. But for most people, this isn't a boom time. As consumers tighten their belts, Ulta's flexibility starts to look like a feature, not a flaw.