When Warren Buffett dumps a stock, it usually gets the financial world (twitter/reddit) buzzing faster than a teenager who just discovered energy drinks. The logic is simple: if the Oracle of Omaha is out, he must know something the rest of us don’t. The stock’s gotta be dead money, right?

That’s exactly what happened when Buffett’s Berkshire Hathaway offloaded Ulta Beauty. Investors took one look at the move and collectively said “we’re cooked.” Ulta cratered nearly 26% drop since Buffett sold. It was like Wall Street suddenly realized makeup existed and went, "Wait, people actually buy this stuff?"

But hold up… Ulta’s latest earnings might just be proving Grandpa Warren wrong.

After months of getting beat up so mad even makeup couldn’t hide the damage, Ulta Beauty just posted a surprisingly solid Q4. The stock is up 7% in premarket trading after earnings per share came in at $8.46, smashing the $7.13 estimate. Net sales hit $3.49 billion, also slightly above expectations. Even comparable sales climbed 1.5%, which isn’t exactly a beauty pageant-winning figure but still better than the 0.8% analysts predicted.

So, was the Buffett sell-off overblown? Maybe. Maybe not. Before we get too excited, let’s not ignore the elephant in the room… its 2025 outlook wasn’t exactly flattering (more like lipstick on a pig). The company expects EPS of $22.50–$22.90, which is below Wall Street’s $23.47 estimate. Sales growth is also looking slow as a slug (as my Grandpa would say), with guidance suggesting comparable sales will be flat to up 1%.

And then there’s competition. Ulta isn’t only fighting Sephora anymore… it’s up against beauty aisles at Walmart, Amazon, Macy’s, and every influencer with a ring light and a TikTok account. CEO Kecia Steelman admitted, “For the first time, we lost market share in the beauty category in 2024.” And I’d bet it’s only going to get worse.

The good news is that unlike some CEO’s, Steelman isn’t sitting around hoping lip gloss sales magically spike. She’s focused on investing in digital, adding more automation, real-time content, and app features to keep customers hooked. Ulta is also expanding its eCommerce presence with a curated online marketplace launching in late 2025 to broaden its product selection. Execution issues have also been a pain point… I guess Ulta’s “buy online, pick up in-store” and “same-day delivery” rollout is not going great so far, but they’re working on it.

(Source: WWD)

Look, Buffett’s track record speaks for itself, and it’s fair to say that selling Ulta wasn’t a fluke. The beauty industry is getting cutthroat, Ulta’s market share is slipping, and the company is staring down a “reset year” filled with investments that could eat into profitability.

But despite what we all thought after ole Warren sold… Ulta isn’t some washed-up mall brand desperately clinging to relevance. Beauty remains a strong category, and Ulta still dominates in sheer scale. If Steelman can execute on her turnaround plan, there’s a world where Buffett’s move to abandon Ulta ends up looking premature.

The stock is down, sentiment is weak, and expectations are low… a perfect setup for an eventual rebound. And if that happens, well, the Oracle of Omaha might just have to eat a little humble pie.

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Stock.News has positions in Amazon.