Business News

Ulta shares fall on weaker-than-expected outlook, retailers faucet Dave Kimbell as CEO

In an Ulta store in New York.

Scott Mlyn | CNBC

Ulta Beauty said Thursday that fourth quarter sales and earnings were down year-over-year, hurt by weaker cosmetics sales during the pandemic.

Although the decline was less than expected, stocks fell as the beauty retailer issued a disappointing outlook for the year ahead. Ulta shares fell more than 8% after the bell.

The company also announced that its CEO, Mary Dillon, is stepping down in June and will be replaced by President Dave Kimbell.

Dillon will also become CEO of the company.

Kecia Steelman, Ulta’s chief store operations officer, has been promoted to chief operating officer.

The company reported for the fourth quarter, versus Wall Street analysts' expectations based on a survey by Refinitiv:

Earnings per share: $ 3.41, adjusted versus $ 2.35 expected Revenue: $ 2.2 billion versus $ 2.08 billion expected

Ulta reported net income of $ 171.5 million, or $ 3.03 per share, for the fourth quarter, compared to $ 222.7 million or $ 3.89 per share last year.

Disregarding items, Ulta earned $ 3.41 per share, beating analysts polled by Refinitiv, which was expecting $ 2.35 per share.

Net sales fell to $ 2.2 billion from $ 2.31 billion last year, beating expectations of $ 2.08 billion.

Sales in stores that have been open for at least 14 months decreased 4.8% over the past period, negatively impacted by fewer transactions. The company said transactions were down 12.2%, but the average purchase per ticket increased 8.3%.

For fiscal 2021, Ulta expects earnings between $ 8.85 and $ 9.30 per share on revenue of $ 7.2 to $ 7.3 billion. The earnings forecast includes the impact of share buybacks of approximately $ 850 million.

According to Refinitiv, analysts had expected Ulta to make $ 10.61 per share on sales of $ 7.32 billion.

Revenue in the same store is expected to be between 15% and 17%, the company said.

Ulta plans to open 40 new Netto stores and remodel around 21 stores in the coming year.

In November, Ulta announced plans to open small cosmetics stores in hundreds of Target stores across the country to increase sales and expand reach.

The cosmetics retailer was injured due to temporary store closings during the pandemic. After reopening stores in July, the company saw a return in demand with a strong comeback of its mobile app and e-commerce website.

Read the full results publication here.

Related Articles