ulta beauty The company’s results on Thursday beat Wall Street’s third-quarter earnings expectations, fending off concerns about increased competition and slowing demand for makeup and skin care.
The retailer slightly raised its full-year outlook, reflecting better-than-expected results. For the fiscal year, the company said it expects net sales to be in the range of $11.1 billion to $11.2 billion, compared with its previous guidance of $11.0 billion to $11.2 billion.
The company said it now expects full-year earnings to be in the range of $23.20 to $23.75. $22.60 to $23.50. Comparable full-year sales forecasts range from a 1% decline to flat sales. The comparable sales metric tracks sales at Ulta stores open for at least 14 months and online sales.
Despite the outlook upgrade, the company still expects holiday quarter comparative sales to decline by a low single digit.
In a news release, CEO Dave Kimbell said he is “proud of the progress” the company has made and that “our efforts to strengthen our market position and drive improved business performance continue. “We are encouraged by early signs that we are on track.”
Here’s a look at what the beauty retailer reported for the three months ended Nov. 2 compared to Wall Street’s expectations, based on a survey of analysts by LSEG.
- Earnings per share: $5.14 vs. $4.54 expected
- Revenue: $2.53 billion vs. $2.50 billion expected
Ulta stock rose more than 10% in after-hours trading.
Beauty is a strong category for many retailers, holding up well over the past few years even as inflation squeezed household budgets and many shoppers cut back on discretionary purchases. The resilience of this category has led to the creation of companies such as: target, walmart, kohls and Macy’s To expand our makeup and skin care product offerings.
But Ulta began hinting at potential problems in April, with Kimbell warning at an investor conference that it was cooling demand for beauty products.
Ulta’s results in recent quarters reflect discerning shoppers and increasing competition. The company was unable to announce financial results due to a decline in same-store sales, and in August it revised its full-year forecast downward. It was the first time in nearly four years that the company had fallen short of Wall Street’s expectations.
The company’s stock price also fell. As of Thursday’s close, Alta’s stock price had fallen about 19% since the beginning of the year, lagging the S&P 500 index, which had risen about 28% over the same period.
For its fiscal third quarter, the company reported net income of $242.2 million, or $5.14 per share. This compared to $249.5 million, or $5.07 per share, in the year-ago period.
Revenue increased from $2.49 billion in the same period last year.
Comparable sales increased 0.6% year-over-year as the retailer saw a slight increase in traffic and average ticket count.
Customer transactions across websites and stores increased 0.5% year-over-year, and average ticket (the amount of money spent by shoppers during a store visit) increased 0.1% year-over-year.
Kimbell said on the earnings call that the launch of new brands, rollout of digital tools and in-store events contributed to Alta’s improved results in the quarter.
For example, Ulta is selling a special makeup line to coincide with the release of the Universal movie “Wicked,” he said. We’ve also added new features for online, including enhanced virtual try-on capabilities and a new digital buying guide. There were also in-store events, including a workshop where customers received instruction from Ulta stylists on how to achieve a “salon-worthy blowout.”
For beauty retailers, including Ulta, the holiday season is the most important time of the year. Kimbell said the company is “encouraged by its performance leading up to Cyber ​​Monday.”
However, he suggested there was still a difficult background. He said the company was ready for the shopping season even though “our insights suggest that economic concerns are driving an increased focus on value.” .
Chief Financial Officer Paula Oybo said in an earnings call that the company continues to take a “cautious view of the consumer and operating environment” and has factored that into its forecasts. He said a compressed holiday season with five fewer days between Thanksgiving and Christmas could also hurt sales.
Disclosure: Comcast is the parent company of NBCUniversal and CNBC. NBCUniversal is the distributor of “Wicked.”
