Mirror Mirror on the Wall...Target Beauty Bar Better Than Them All?

Research evidence excerpt

Mirror Mirror on the Wall...Target Beauty Bar Better Than Them All?

Broadlines & Hardlines

Mass Merchants - Market Weight

TARGET CORPORATION (TGT) June 8, 2026

Mirror Mirror on the Wall...Target Beauty Bar Better Than Rating:

Them All? Peer Perform

Price:

$122.57

The Wolfe Byte Price Target:

In this note, we run through the implications from the end of the Target & Ulta NA

partnership. We think the conversion adds some risk to 3Q/4Q comps in the View TGT Model

View Comp Table40-60bps range, but should moderate as more stores are converted. Long-term,

we expect margins in beauty to improve. Company Information

52-Week Range $84 - $132

Market Cap. (MM) $55,670

We also think the Partnership has introduced Target to new brands, which is Enterprise Value (MM) $71,540

increasingly important as more retailers lean into the category and it moves DTC. Shares Out. (MM) 454.2

Avg. Value Traded (MM) $591.24

(=/-) Partnership $550-650mm of Target's Sales; 40-60bps Potential Drag in 3Q SI% of Float 3.2%

& 4Q. Beauty is one of Target's most strategic categories, and the Ulta Partnership Price Performance

accounts for less than 5% of beauty sales (~$13bn across the category at Target). This YTD LTM

implies that the partnership represents $550-650mm in sales. It is a very productive TGT 23% 23%

S&P 500 8% 25%

part of the store, given its prime placement on "Action Alley" and is located in

140wealthier zip codes (only in ~1/3 of stores). Assuming each Ulta Shop in Shop is ~1.0k

sq ft, this part of the store generates ~$1.0k / ft in sales vs the chain avg at $420 / 130

ft and Ulta of ~$750. 120

(+) Beauty Should Be Margin Accretive, but Ulta Royalty Reduced Profitability 100

90Materially. End of Partnership Should Be A Margin Tailwind for Target. Ulta's gross