Sephora makes bold move to reverse concerning customer behavior

LVMH (LVMHF) , which owns beauty retail giant Sephora, recently suffered from an unexpected shift in customer behavior.

In LVMH’s first-quarter earnings report for 2025, it revealed that its U.S. sales “saw a slight decline” during the quarter, while the company’s overall sales in perfumes and cosmetics remained flat.

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During an earnings call in April, LVMH Chief Financial Officer Cécile Cabanis said that Sephora was one of the main reasons for the decrease in U.S. sales.

“Sephora, on the other hand, faced very challenging comps after growing double-digit last year, and this explained the sequential deceleration of the U.S. market at group level,” said Cabanis.

She said that Amazon (AMZN) has been “very aggressive” about lowering prices, which contributed to Sephora’s lower-than-expected U.S. sales.

“In the U.S., we have a bit less momentum when it comes to e-commerce, especially because Amazon is being very aggressive, and being aggressive is mostly regarding price, and we try to avoid this technique,” said Cabanis.

She also warned that Sephora is suffering from an overall “softer demand in beauty,” which may be partially due to consumers being concerned about tariffs and the U.S. economy.

Sephora announces a major deal to attract shoppers

As Amazon prepares its big Prime Day sales event, Sephora has just made a huge effort to push more customers into its stores and away from online shopping.

Sephora recently announced in a new press release that it has partnered with Lyft to offer customers $20 off rides to select Sephora stores in New York City, Seattle, Los Angeles, San Francisco, and Chicago.

Select Lyft vehicles involved in the partnership will even be “custom wrapped with Sephora branding.”

In addition, Sephora is offering customers who visit stores $10 off any order over $50 at checkout, a free personalized “skin scan,” and exclusive product sampling. These promotions will last between July 7 and July 10.

“We know that people today highly value in-person experiences when they’re shopping for prestige beauty,” said Sephora U.S. Chief Marketing Officer Zena Arnold in the press release. “They’re looking for human connection and an expert-guided shopping journey, unique to their needs and goals.”

Amazon Prime Day is a major threat to beauty retailers

The move from Sephora comes ahead of Amazon Prime Day, which will offer significant discounts on a wide range of products between July 8th and July 11th.

It is no surprise that Sephora is stepping up its game to win over customers during Amazon’s big sales event, since the online retailer is offering bold deals on beauty products.

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For example, Amazon is offering Prime members savings of up to 35% on fan-favorite Korean beauty products, up to 30% on select luxury fragrances, and up to 40% on select cosmetics such as “Tarte, Urban Decay, and IT Cosmetics,” according to a recent press release.

Sephora isn’t the only beauty retailer that recently noticed a pullback in consumer spending as Amazon continues to target more beauty consumers.

During an earnings call in May, Ulta (ULTA) CEO Kecia Steelman said that hair care sales remained flat during the first quarter of 2025, while makeup sales “decreased slightly.”

“Consumer engagement with beauty remains healthy, and our insights indicate beauty and wellness remain a top priority for beauty enthusiasts who tell us that they’re more willing to make tradeoffs in other discretionary areas to maintain their beauty regimens,” said Steelman during the call. “At the same time, they are cautious, and value is an increasingly important priority as they navigate ongoing wallet pressures.”