An exterior view of an Ulta Beauty store at the Monroe Marketplace Shopping Center.
Paul Weaver | SOPA Images | Lightrocket | Getty Images
Even the beauty industry is expecting a weak 2025.
Ulta Beauty on Thursday gave worse full-year profit and revenue guidance than Wall Street expected, after reporting holiday-quarter results that beat analyst forecasts.
The retailer, which appointed Kecia Steelman as its new CEO in January, said it’s expecting comparable sales to be flat or grow 1% in 2025, while analysts had anticipated they would rise by 1.2%, according to StreetAccount.
It’s expecting full-year earnings to be between $22.50 and $22.90, lower than expectations of $23.47, according to LSEG.
Ulta is the latest company to forecast a rocky 2025, but it stands in contrast to other retailers because beauty has been a source of strength in the industry even as other discretionary categories slowed.
Still, shares rose 6% in extended trading.
Here’s how the beauty retailer did in its fiscal fourth quarter compared with what Wall Street was anticipating, based on a survey of analysts by LSEG:
- Earnings per share: $8.46 vs. $7.12 expected
- Revenue: $3.49 billion vs. $3.46 billion expected
The company’s reported net income for the three-month period that ended Feb. 1 was $393 million, or $8.46 per share, compared with $394 million, or $8.08 per share, a year earlier.
Sales dropped to $3.49 billion, down about 2% from $3.55 billion a year earlier. Like other retailers, Ulta benefited from an extra selling week in the year-ago period, which has negatively skewed results.
In January, Ulta announced that its longtime CEO Dave Kimbell would be replaced by its then Chief Operating Officer Steelman, who has been with the retailer for more than a decade. She’s only been in the role for about two months, and while she said in a statement that she’s proud of the company’s performance thus far, said that more work still needs to be done.
“Fiscal 2025 will be a pivotal year as we make purposeful investments to fuel our future growth and move quickly to optimize our business,” said Steelman. “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.”
She didn’t share any commentary on quarter-to-date trends or what the company factored into its guidance.
During Ulta’s holiday quarter, comparable sales climbed 1.5%, beating expectations of 0.8% growth, according to StreetAccount. Customers spent more during the quarter, resulting in a 3% rise in average ticket, but fewer shoppers came to Ulta’s stores to buy beauty products. Transactions during the quarter decreased by 1.4%.
Part of that is likely because Ulta faces more competition than ever. Not only does it compete with rival Sephora, but also mass retailers like Macy’s, Walmart and Amazon have made beauty a cornerstone of their strategies and have all expanded their selections of makeup and skincare products.
Last year, Ulta warned of a cooling beauty market, but companies like E.l.f. Beauty and Oddity didn’t see similar dynamics, and beauty sales remained strong at retailers like Macy’s and Target.
In the meantime, Ulta has focused on boosting profitability. It managed to grow earnings during the quarter, even with one less selling week.
