An Ulta Magnificence retailer in New York, US, on Monday, Aug. 19, 2024.
Yuki Iwamura | Bloomberg | Getty Photographs
Ulta Magnificence shares fell 7% in prolonged buying and selling Thursday as the corporate fell wanting second-quarter expectations and trimmed its full-year steerage after a decline in same-store gross sales throughout the newest interval.
It was the corporate’s first earnings per share miss since Might 2020 and first income miss since December 2020.
Comparable gross sales for the second quarter fell 1.2%, in contrast with an 8% improve a yr earlier and properly under the 1.2% progress that Wall Road analysts had anticipated, based on StreetAccount.
“Whereas we’re inspired by many optimistic indicators throughout our enterprise, our second quarter efficiency didn’t meet our expectations, pushed primarily by a decline in comparable retailer gross sales. We’re clear concerning the components that adversely impacted our retailer efficiency, and we now have actions underway to handle the traits,” CEO Dave Kimbell mentioned a press launch.
The corporate now forecasts full-year same-store gross sales in a spread of flat to 2% down, in contrast with prior steerage of two% to three% progress.
“Our up to date outlook for gross sales assumes it should take extra time for our actions to vary the highest line trajectory and that shops impacted by a number of aggressive openings will proceed to be pressured,” CFO Paula Oyibo mentioned.
Ulta additionally now expects full-year income of $11 billion to $11.2 billion, down from earlier steerage of $11.5 billion to $11.6 billion, and full-year earnings per share of $22.60 to $23.50, down from a earlier forecast of $25.20 to $26.
Here is how the sweetness retailer carried out within the interval ended August 3 in contrast with what Wall Road was anticipating, based mostly on a survey of analysts by LSEG:
- Earnings per share: $5.30 vs. $5.46 anticipated
- Income: $2.55 billion vs. $2.61 billion anticipated
The corporate reported internet earnings of $252.6 million, or $5.30 per share, in contrast with $300.1 million, or $6.02 per share, throughout the identical quarter a yr earlier.
Income rose to $2.55 billion, up from $2.53 billion a yr earlier.
Earlier this month, Warren Buffet’s Berkshire Hathaway disclosed a $266 million stake within the magnificence retailer, sending Ulta shares surging. For some analysts, it was validation that the inventory was oversold after falling 32% in 2024 as much as that time, tumbling 26% within the second quarter alone.
Shares of Ulta have been struggling since CEO Dave Kimbell warned of cooling magnificence demand at an investor convention again in April. Kimbell mentioned though a pullback was anticipated, it had hit the corporate “a bit earlier and bit larger” than anticipated.
Through the firm’s first-quarter earnings name in Might, Kimbell outlined plans to spice up gross sales that spanned 5 key areas: product assortment, model social relevance, enhancing the patron digital expertise, boosting the loyalty program and evolving the corporate’s promotional levers.
In the identical name, Kimbell additionally mentioned the sweetness retailer later this yr could be increasing its partnership with supply service DoorDash, would begin testing new gamification platforms and would activate new advertising and marketing know-how to personalize buyer procuring expertise.
Clarification: This story has been up to date to make clear that Ulta Magnificence forecast full-year earnings per share of $22.60 to $23.50, down from a earlier forecast of $25.20 to $26.
