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BOLINGBROOK, Ill.– Ulta Beauty exceeded expectations in its fourth-quarter earnings, fueled by strong holiday sales of cosmetics and perfumes. However, it issued a cautious 2025 outlook due to consumer uncertainty, increasing competition, and internal challenges.
The company reported net sales of $3.49 billion for the quarter ended February 1, a 1.9% decline from the previous year but still exceeding analysts' expectations of $3.46 billion. Earnings per share came in at $8.46, well above the anticipated $7.12 per share, leading to a 7% jump in Ulta’s stock during extended trading.
“The Ulta Beauty team delivered stronger-than-expected revenue, profitability, and diluted EPS in the fourth quarter. I am incredibly proud of our team’s collective impact on the business and the care they showed our guests throughout the holiday season, positioning us to finish fiscal 2024 ahead of our expectations,” said Kecia Steelman, president and chief executive officer. She took over as CEO in January following the retirement of Dave Kimbell.
She continued, “I am incredibly optimistic about the future of Ulta Beauty, as I believe we have the right elements to drive our success – a strong business model, an ambitious long-term plan, and passionate associates who bring our brand to life for our guests every day. Fiscal 2025 will be a pivotal year as we make purposeful investments to fuel our future growth and move quickly to optimize our business. While it will take time to see the impact of these efforts, we are confident these investments will help reignite our momentum and unlock sustained growth and long-term value for our shareholders."
Ulta enjoyed strong holiday sales and promotions like Walmart and Amazon, attracting customers with Thanksgiving discounts. In contrast, competitors like Coty, Elf Beauty, and L'Oreal experienced slower growth in the U.S. mass beauty market.
Despite the positive Q4 performance, Ulta warned of a challenging year ahead, forecasting full-year sales between $11.5 billion and $11.6 billion, below analysts’ estimates of $11.67 billion. Profit per share is expected to range between $22.50 and $22.90, compared to Wall Street’s expectations of $23.47.
Ulta has encountered operational difficulties, particularly with new fulfillment options such as buy online, pickup in store, same-day delivery, and ship from store.
Despite Ulta facing a changing market, beauty products continue to be a robust retail segment. In Q4, Ulta’s comparable sales rose by 1.5%, exceeding the expected growth of 0.8%. However, a 1.4% decline in transactions suggests fewer customers visited the stores, even though the average spending per customer increased by 3%.
