Ulta Beauty has issued weak guidance for the upcoming year, attributing its challenges to internal missteps, increased competition, and consumer uncertainty. Newly appointed CEO Kecia Steelman projected that comparable sales will only increase 0-1% in 2025, while expected full-year revenues are lower than analysts predicted. The company is facing a transition year, investing in improvements to regain competitiveness despite the expected impact on profitability. In its recent fourth-quarter earnings, Ulta reported earnings per share of $8.46, beating forecasts, but saw a revenue decline to $3.49 billion, down 2% from the previous year.
Steelman acknowledged Ulta’s difficulties, particularly in launching new fulfillment options, which have affected in-store experiences. As the competitive landscape in the beauty market intensifies, with rivals like Sephora, Macy’s, Walmart, and Amazon expanding their beauty offerings, Ulta has lost market share in 2024 for the first time. Notably, comparable sales increased 1.5% during the holiday quarter, but fewer shoppers visited Ulta stores. Despite these hurdles, Steelman is committed to resetting the business to regain lost market share and improve long-term growth. Stocks rose 6% in response to the company’s plans.
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