Inside an Ulta store in New York.
Scott Mlyn | CNBC
Ulta Beauty said Thursday that sales and profits fell in the fourth quarter of last year, hit by weaker cosmetics sales during the pandemic.
Although the decline was smaller than expected, the shares fell as the beauty retailer gave a disappointing outlook for the coming year. Ulta shares fell more than 8% after the clock.
The company also announced that its CEO, Mary Dillon, will retire in June and be replaced by President Dave Kimbell.
Dillon will also step down as executive chairman of the company’s board.
Kecia Steelman, Ulta’s chief operating officer for stores, is promoted to chief operating officer.
This is what the company reported for its fourth quarter, compared to what Wall Street analysts expected, using a Refinitiv survey:
- Earnings per share: $ 3.41, adjusted to $ 2.35 expected
- Revenue: $ 2.2 billion versus $ 2.08 billion expected
Ulta had fourth-quarter fiscal net income of $ 171.5 million, or $ 3.03 per share, compared to $ 222.7 million, or $ 3.89 per share, a year earlier.
Excluding items, Ulta earns $ 3.41 per share, above the $ 2.35 per share expected by analysts interviewed by Refinitiv.
Net sales fell to $ 2.2 billion from $ 2.31 billion a year ago, beating expectations of $ 2.08 billion.
Sales at stores that have been open for at least 14 months have fallen by 4.8% in the most recent period, causing fewer transactions. According to the company, transactions decreased by 12.2%, but the average purchase per ticket increased by 8.3%.
For fiscal 2021, Ulta expects to earn between $ 8.85 and $ 9.30 per share on revenue of $ 7.2 billion to $ 7.3 billion. The profit forecast includes the impact of approximately $ 850 million in share buybacks.
Analysts expected Ulta to earn $ 10.61 per share on revenue of $ 7.32 billion, according to Refinitiv.
The company’s sales are expected to be between 15% and 17%.
Ulta plans to open 40 new stores in the coming year and renovate about 21 stores.
In November, Ulta announced plans to open small cosmetic stores in hundreds of Target stores across the country to drive higher sales and increase their scope.
The cosmetics retailer was hurt during the pandemic by temporary store closures. After reopening stores in July, the company saw its demand return with a strong return in its mobile app and e-commerce website.
Read the full income release here