Closing Bell: Ulta Jumps, Costco Defies Tariff Worries, Gap Drops
May 30, 2025
Ulta Beauty's shares soared over 12% after exceeding profit expectations, driven by unique products like a new hair-care line from Beyoncé. Meanwhile, Costco demonstrated resilience with strong earnings, even amid economic uncertainties and tariff worries. The talk shifts to disappointing results from Gap and other firms, showcasing challenges in the retail sector. Insights on the effects of federal spending on tech companies like Palantir and major S&P 500 decliners add depth to the discussion.
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Beauty Spending Defies Downturns
Ulta Beauty shows that beauty products sell well even in economic uncertainty.
Exclusive product lines, like Beyoncé's hair-care line, support their strong sales.
question_answer ANECDOTE
Personal Shopper Boosts Costco Growth
Scarlet Fu highlighted her significant Costco purchases contributing to its growth.
Bulk buying and club memberships create customer loyalty for Costco.
insights INSIGHT
Government Contracts Boost Palantir
Palantir's stock rose sharply after news of expanded government contracts.
Federal spending significantly supports Palantir's business.
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Ulta Beauty (ULTA) shares surged the most since 2020 after delivering first-quarter results that topped Wall Street estimates, signaling that shoppers are buying up beauty products despite growing economic concerns. Profit last quarter was $6.70 a share, the company said Thursday after markets closed, beating analyst expectations for $5.80. Comparable sales were also higher than expected. The company boosted its full-year outlook for sales and profit. The better-than-expected results bode well for the turnaround plan led by Steelman as growing economic worries push consumers to pull back spending elsewhere. The company’s effort in part leans on exclusive products such as a new hair-care line from Beyoncé.
Costco (COST) shares were up after the retailer posted better than expected earnings in the third quarter, a sign that the nation’s largest club chain is flexing its scale and devoted following to navigate tariffs and economic turbulence. Costco is the latest big-box retailer to post quarterly results, as investors and analysts search for clues on how shoppers are spending. Many consumer-facing companies have posted soft results in recent weeks with Target Corp., Procter & Gamble Co. and Kraft Heinz Co. slashing their annual outlooks. Walmart Inc. and a handful of names have been outliers with strong results. Sweeping, on-again, off-again US tariffs have upended operations across industries, fueling chaos among companies, investors and consumers. Courts are weighing in on whether these tariffs can stay in effect.
Gap (GAP) shares dropped nearly 21% during trading on Friday after the apparel retailer predicted a tariff impact of as much as $300 million, offsetting better-than-expected results at its biggest brands. On Thursday, Gap said tariffs could result in a $250 million to $300 million hit if they remain at current levels of 30% for most goods from China and 10% for other countries. The retailer said it has strategies to mitigate more than half of that cost. Gap reiterated its full-year guidance for sales and operating income, but added the outlook doesn’t include the potential impact of any duties.
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