Ulta Beauty and Target said Thursday that they have decided to end a deal that opened makeup and beauty shops in hundreds of Target’s stores.

Shares of Target fell about 2% in early trading, while Ulta’s stock slid about 1%.

In a news release, the companies said the partnership — which also added some of Ulta’s merchandise to Target’s website — will end in August 2026. Target had added more than 600 Ulta Beauty shops to its stores since 2021, according to a company spokesperson. That’s nearly a third of Target’s 1,981 U.S. stores.

Ulta Beauty at Target shops carried a smaller and rotating assortment of the merchandise at the beauty retailer’s own stores. They were staffed by Target’s employees.

The loss of the popular beauty retailer’s products could be another blow to Target as it tries to woo back both shoppers and investors. Target’s annual sales have been roughly flat for four years and it expects sales to decline this fiscal year. Shares of the company are worth less than half of what the were back in 2021, when they hit an all-time closing high of $266.39. It also has faced backlash over both its Pride collection and its rollback of key diversity, equity and inclusion initiatives.

Store traffic for Target has declined year over year nearly every week from the week of Jan. 27, days after the company’s DEI announcement, through the week of Aug. 4, according to Placer.ai, an analytics firm that uses anonymized data from mobile devices to estimate overall visits to locations. Target traffic had been up weekly year over year in the four weeks before Jan. 27.

The only exceptions to that trend were the two weeks on either side of Easter, when traffic rose less than 1% year over year, the firm’s data showed.

On earnings calls and in investor presentations, leaders of the Minneapolis-based company had touted Ulta’s shops and its trendy beauty brands as a way to drive store traffic.

At a investor presentation in New York City in March, CEO Brian Cornell highlighted beauty as a growth category for Target and cited it as reason for confidence in Target’s long-term business. He said the company had gained market share in beauty and its sales in the category rose by nearly 7% in the fiscal year that ended in early February.

Target’s CEO Brian Cornell, 66, is expected to depart the company soon. The longtime Target leader renewed his contract for approximately three years in September 2022 after the board scrapped its retirement age of 65.

David Bellinger, an analyst for Mizuho Securities who covers retailers, said in an equity research note on Thursday that Target’s “messy in-store operations” as well as issues with retail theft and insufficient staffing at stores likely contributed to the companies ending their partnership.

“Overall, we see losing the Ulta shop-in-shop relationship as a negative development and something else Target’s next CEO will have to grapple with,” he wrote.

In a statement on Thursday, Target Chief Commercial Officer Rick Gomez said the discounter is “proud of our shared success with Ulta Beauty and the experience we’ve delivered together.”

“We look forward to what’s ahead and remain committed to offering the beauty experience consumers have come to expect from Target — one centered on an exciting mix of beauty brands with continuous newness, all at an unbeatable value,” he said.

In a statement, Ulta’s Chief Retail Officer Amiee Bayer-Thomas described the Target deal as “one of many unique ways we have brought the power of beauty to guests nationwide.”

“As we continue to execute our Ulta Beauty Unleashed plans, we’re confident our wide-ranging assortment, expert services and inspiring in-store experiences will reinforce our leadership in beauty and define the next chapter of our brand,” she said.

For years, conservative groups and corporate leaders argued that the U.S. government would be better if it were run like a business.

For President Donald Trump, who has controlled his own businesses for decades, that looks like taking an increasingly active role in individual corporations’ affairs, from manufacturing to media to tech firms.

And corporations are meeting the demands of a president who is more freely exerting his powers than he did the last time he was in office. At Trump’s urging, Coca-Cola said it would produce a version of its namesake soda with U.S.-grown cane sugar. Paramount paid millions to settle allegations Trump levied against CBS’ venerated “60 Minutes.” Two major semiconductor makers agreed to give the government a cut of their sales in China. The CEO of Intel met with Trump soon after the president called on him to resign.

“It’s so much different than the first term,” said a Republican lobbyist whose firm represents several Fortune 500 companies, who spoke on condition of anonymity to speak candidly. “He’s just acting like a businessman. In his first term, I think he was trying to cosplay as a politician. He’s more comfortable in his own skin, too. He can explain deals better.”

Trump’s role represents a break with past administrations that may have been unwilling or unable, politically, to bring similar pressure to bear on businesses. In the past, small-government conservatives once accused previous Democratic administrations of attempting to “pick winners and losers” by trying to regulate industries. Trump today stands downstream of a bolder right-wing movement that calls for enhanced state intervention in corporate affairs.

Trump has said the corporate concessions are intended to boost the U.S. economy.

And the White House, in a statement, reinforced the idea that Trump’s involved approach to private-sector dealings is a key part of his economic agenda.

“Cooled inflation, trillions in new investments, historic trade deals, and hundreds of billions in tariff revenue prove how President Trump’s hands-on leadership is paving the way towards a new Golden Age for America,” White House spokesperson Kush Desai said.