Ulta Magnificence Cuts Gross sales Outlook on Slowing Shopper Demand

The retailer sees web gross sales of $11 billion to $11.2 billion within the present yr, down from its earlier estimate of $11.5 billion to $11.6 billion. Second-quarter comparable retailer gross sales additionally missed Wall Road expectations.

The shares fell 7 % in postmarket buying and selling in New York as of 5:55 p.m. Via Thursday’s shut, the inventory had dropped 25 % this yr.

Ulta has seen swift gross sales lately, however the demand has weakened as customers pull again on discretionary purchases. The corporate can be dealing with extra competitors from rivals like Sephora, Goal Corp., Walmart Inc. and on-line sellers akin to Amazon Inc.

“Shopper conduct is beginning to shift as shoppers more and more deal with worth, and turn out to be extra cautious with their spending,” Ulta’s chief government officer Dave Kimbell stated on a convention name. “Our market share continues to be challenged significantly for status make-up and hair care objects,” he stated.

Gross sales moderated in the course of the quarter as promotions boosted on-line gross sales however didn’t drive retailer visitors.

Kimbell stated pressures will doubtless proceed within the close to time period, with extra rivals opening extra shops close to Ulta places. The wonder retailer has 1,411 shops throughout the US, and plans so as to add as many as 65 web new places this yr.

Ulta additionally lowered its comparable gross sales and earnings per share forecasts for the yr.

The corporate’s disappointing outcomes are an “alarm sign,” stated Bloomberg Intelligence analyst Lindsay Dutch. The corporate’s second-quarter miss and pretty steep downward revision to steering “distinction with broader beauty-category traits, suggesting the challenges are particular to Ulta and a turnaround plan is required,” she stated.

Bathtub & Physique Works Inc., which additionally sells make-up and shampoo, lowered its income steering for the yr on Wednesday. The corporate stated its retailer visitors has been pressured as US customers develop more and more cautious about spending.

By Leslie Patton

Berkshire Hathaway Takes Stake in Ulta Magnificence

Berkshire added 690,106 shares of Ulta and 1.04 million shares of Heico, in response to a regulatory submitting.