ultimate beauty Plans were laid out Thursday to boost sales and expand market share after sales slowed in the first quarter.
Comparable sales, a metric that tracks sales at Ulta stores open for at least 14 months as well as online, increased 1.6% year over year, a marked slowdown from the same period last year, when Ulta reported a 9.3% comparable sales increase
“We expect growth to accelerate in the second half to 2% to 4%, reflecting the impact of our sales-driven plans,” Chief Financial Officer Paula Oyibo said on the company’s earnings call.
Ulta CEO Dave Kimbell warned at an April investor conference that demand in the beauty category was cooling. Kimbell said that while the slowdown was largely expected, the company was hit “earlier and harder” than expected.
Kimbell acknowledged Thursday that market share has been challenged in the past few quarters, especially in the high-end beauty category.
“We are not satisfied with the market share trends and we are taking actions to solidify our leadership position and accelerate growth,” Kimbell said on the earnings call. He added that the company would share further details at its analyst day in October. long term plan.
Kimbell outlined five key areas where the company plans to take concrete action: strengthening selection with 25 new brands, including Ulta exclusives from celebrities like Serena Williams and Bella Hadid; accelerating social relevance by expanding its network of creators nature; enhancing consumers’ digital experiences; leveraging loyalty programs; and evolving promotional tools.
The company will also expand partnerships with delivery services door panel, the company offers same-day delivery from stores and relies on their app adoption. Kimbell said the Ulta app accounted for 57% of e-commerce sales during the quarter.
Kimbell also announced that the company is testing a new gamification platform and will launch new marketing technology later this year to help guests create a personalized shopping experience.
Ulta’s shares rose about 11% in after-hours trading Thursday.
Beauty companies are like this executed during Compared with Wall Street expectations, according to a survey of analysts by London Stock Exchange Group (LSEG):
- Earnings per share: $6.47 vs expected $6.24
- income: US$2.73 billion, expected US$2.72 billion
Ulta reported net income of $313.1 million, or $6.47 a share, for the quarter ended May 4, compared with $347.1 million, or $6.88 a share, a year earlier.
Net sales rose slightly to $2.73 billion from $2.63 billion in the same period last year.
The company lowered its guidance for the current fiscal year. Ulta reported that it now expects net sales to be in the range of $11.5 billion to $11.6 billion, with comparable sales in the range of 2% to 3%. The company had previously forecast full-year net sales of $11.7 billion to $11.8 billion, with comparable sales of 4% to 5%.
Ulta also lowered its full-year earnings per share guidance to $25.20 to $26 from the previous range of $26.20 to $27.
Ulta Beauty has been a strong performer for retailers as they face shrinking shoppers as costs continue to rise. beauty brand Elf It recently announced its first billion-dollar fiscal year, beating Wall Street expectations and sending its stock price soaring.
Artificial Intelligence Powered Beauty Company Odd Technology recently told CNBC that the industry is not seeing much of a slowdown, but rather a shift in business.
Oddity Chief Financial Officer Lindsay Drucker Mann told CNBC: “We are definitely seeing an industry that is transforming. So, consumers are moving online, and consumers are moving to efficient products that really solve their problems.
Wall Street has been cooling on Ulta ahead of its earnings report, with analysts at Baird and Canaccord Genuity lowering their price targets in recent days.
“We believe the beauty category is resilient,” analysts at Jane Hali & Associates said in a recent report on Ulta. “Despite reduced discretionary spending, consumers are still prioritizing beauty products, leading to significant growth in the category. “They will The health category is regarded as a key advantage, but the cosmetics category is cautious.
The company’s shares closed Thursday at $385.58 per share, giving the company a market capitalization of about $18.5 billion.
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