Ulta Beauty (NASDAQ:ULTA) shares dropped over 5% in premarket trading Friday after Warren Buffett’s Berkshire Hathaway (NYSE:BRKa) revealed it had drastically reduced its stake in the cosmetics retailer.
The move, disclosed in a regulatory filing Thursday, showed that Berkshire cut its holdings in Ulta by over 96%, selling the majority of the position it had acquired just a quarter earlier.
Berkshire initially purchased 690,106 shares of Ulta during the second quarter worth about $266.3 million at the time, as revealed in August filings.
However, by the end of the third quarter, its stake had been reduced to just 24,000 shares, signaling a rapid retreat from the investment.
The sell-off follows a challenging year for Ulta, with its shares down more than 21% year-to-date, reflecting broader struggles in the cosmetics retail space.
While the specific reasons behind Berkshire’s decision to sell most of its Ulta stake remain unclear, investors have reacted cautiously to the sharp reduction from a high-profile investor like Buffett, often seen as a signal of underlying concerns.
Premarket trading showed Ulta’s shares at $361.71, marking a 5.5% decline from Thursday’s close. The sell-off adds pressure on the company, which has faced ongoing headwinds in consumer spending.