This is Part IV of an ongoing series on the rise and evolution of Kylie Cosmetics. Read Part I, Part II, Part III, Part VPart VIPart VII and Part VIII.

On November 17, Kylie Cosmetics, the eponymous brand that made the youngest Kardashian the wealthiest, launched in Ulta’s 1,000+ stores and online. It was the first major wholesale partnership for the digitally-native brand, which had started to hit the limits of online-only growth. As we wrote before the launch, this move was important to watch, since Kylie Cosmetics has grown further online than any other brand to date. Luckily, Ulta’s Q4 2018 Earnings Report sheds some light on how the partnership is performing.

Ulta saw strong in-store traffic in Q4 2018, which it largely attributed to the launch of Kylie Cosmetics. When Kylie launched at Ulta, the retailer sold a wider assortment of products in store, while offering a more limited assortment online. Ulta plugged this merchandising strategy by highlighting “in-store only” SKUs on its site. As customers pivoted to shopping the wider selection of Kylie merchandise in stores, Ulta’s ecommerce growth slowed—what it calls a “reverse channel shift.” (The retailer noted that its move away from online promotions also contributed to slackening ecommerce growth, which is bad in the short term, but positive in the long term.)

This channel strategy also relates back to the potential intentions behind Kylie’s decision to wholesale in the first place: Would the company use Ulta to acquire new customers or would the move simply push its sales to the beauty retailer at Kylie’s own expense? So far, a focus on in-store sales is driving growth for both parties. It ensures that Ulta’s growing physical footprint remains a destination, especially for younger shoppers interested in Kylie, while preventing the cannibalization of Kylie’s direct-to-consumer, ecommerce sales, which likely means less customer overlap.

Kylie now ranks as a “top performing prestige brand” at Ulta, along with Estée Lauder, NARS and Tarte, which means that Kylie is likely moving millions of dollars of product through Ulta quarterly alongside these established brands. This success, however, is coupled with inventory problems. Kylie products were out of stock soon after launching at the end of 2018 with 28 lip products. In late January, this merchandise was restocked, along with several new eyeshadow and lip additions, which have helped improve the inventory situation.

Managing inventory in a wholesale environment is a new responsibility for Kylie Cosmetics, since the company is used to relying on the expertise and backbone of Seed Beauty, its manufacturer, which allows it to manufacture and replenish online orders quickly. Integrating Ulta’s logistics requirements and system into the mix introduces a new learning curve and likely slows things down, especially since Kylie is moving from a few points of distribution to over one thousand given Ulta’s massive footprint. Still, Seed Beauty sells some of its other lines in third-party retail, so the skill is not entirely a new one.

While other brands have engineered scarcity-driven merchandising models, it seems that Kylie’s inventory problems at Ulta are more real than manufactured, since being a top performer at Ulta along with brands that have been around for years necessitates funneling millions of units of product. Even so, the stock-out bolsters a perception that Kylie’s products are in high demand—not a negative trait for either party.

Based on this new data, it’s clear that Kylie Cosmetics and Ulta are both gaining from their partnership, thanks to careful management of the customer journey between their respective properties. While plenty can still go wrong with customer cannibalization, managing inventory and stock-outs, so far the arrangement seems like a win-win.