Key Takeaways
- Ulta Beauty warned it is seeing a slowdown in business in the first two months of its fiscal first quarter, and shares tumbled nearly 15% in intraday trading Wednesday.
- The beauty products retailer said if that slowdown continued, it expects current-quarter comparable store sales to be at the low end of its forecast.
- CEO Dave Kimbell explained the pullback was “across price points and segments.”
Ulta Beauty (ULTA) shares sank about 15% in intraday trading Wednesday after the beauty products retailer warned of a significant decline in business.
Chief Executive Officer (CEO) Dave Kimbell told a retail conference that in the first two months of its fiscal year the company has seen “a slowdown in the total category across price points and segments.” He said the broad-based decline came earlier and was somewhat bigger than anticipated.
If the slowdown continues, Ulta expects current-quarter comparable store sales to be at the low end of its previous guidance of a low-single-digit percentage gain, he said.
However, Kimbell said the company is expecting the pullback to moderate later in the year. Ulta is also feeling the effects of stiff competition, especially in prestige makeup and hair care products categories, he said.
With Wednesday’s 14.6% tumble as of 1:45 p.m. ET, Ulta shares fell into negative territory for 2024. The comments also dragged down shares of others in the sector, including Estee Lauder (EL) and Bath & Body Works (BBWI), which were down 4.3% and 3%, respectively.