"For the first time, we lost market share in the beauty category in 2024. I am aware of the challenges that we face," said Kecia Steelman, president and chief executive officer of Ulta Beauty during an analyst call this week.
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In response, the company is launching what it calls the Ulta Beauty Unleashed program to return to growth and market share gains. Key highlights include:
- Focus on core business growth by improving store operations, including navigation, stocking, staffing, and cleanliness, while emphasizing brand building with exclusive and emerging brands like Milk Makeup, Anua, and Beyoncé's Cecred.
- Deepen guest engagement through enhanced personalization, automation, and real-time content across digital channels.
- Accelerate digital efforts with new app and website features to elevate the guest experience.
- Expand into wellness by launching a new e-commerce marketplace offering a broader range of beauty and wellness products.
- Build on international growth and expand Ulta Beauty's presence globally.
- Enhance the Ulta Beauty Media platform with new product innovations and improved closed-loop measurement tools for brands.
- Realign the organizational foundation by optimizing workflows, streamlining costs, and investing in team and culture reenergization to support long-term growth.
New Executive Appointments
To drive growth, Ulta has made a host of executive appointments, including:
- Amiee Bayer-Thomas promoted to Chief Retail Officer: Centralizing all store functions under her leadership, including real estate, store design, store teams, and loss prevention.
- Mike Maresca promoted to Chief Technology and Transformation Officer: Adding enterprise-wide responsibilities to align transformation efforts with cost optimization initiatives.
- Monica Arnaudo now Chief Merchandising and Digital Officer: Overseeing digital, e-commerce, merchandising, and planning teams. Announced plans to retire later this spring; successor to be announced soon.
- Kelly Mahoney promoted to Chief Marketing Officer: Leading efforts in brand, personalization, and loyalty programs. Played a key role in growing the Ulta Beauty Rewards loyalty program to over 44 million members.
- Jodi Caro (General Counsel and Chief Risk & Compliance Officer) retiring later this spring; recognized for over 10 years of service to Ulta Beauty.
- Rene Casares joining as Chief Legal Officer: Former Chief Legal Officer at Academy Sports. Will work with Jodi Caro to ensure a smooth transition.
Ulta Beauty's Q4 and Full-year 2024 Results Breakdown
- Q4 Net Sales: Decreased 1.9% to $3.5 billion (from $3.6 billion), impacted by an extra week of sales in fiscal 2023.
- Comparable Sales: Increased 1.5% in Q4, driven by a 3.0% rise in average ticket but offset by a 1.4% decline in transactions.
- Gross Profit: Q4 gross profit rose to 38.2% of net sales (from 37.7%) due to lower inventory shrink and higher merchandise margin but was offset by higher supply chain costs.
- SG&A Expenses: Increased as a percentage of net sales to 23.4% in Q4 (from 23.1%) due to higher store payroll and benefits.
- Full-Year Net Sales: Increased 0.8% to $11.3 billion, driven by new store contributions despite the extra sales week in fiscal 2023.
- Operating Income: Full-year operating income declined to 13.9% of net sales (from 15.0%) due to higher store and corporate expenses.
- Diluted EPS: Q4 diluted EPS increased to $8.46 (from $8.08), while full-year diluted EPS decreased to $25.34 (from $26.03).
Of the results, Steelman said, “The Ulta Beauty team delivered stronger-than-expected revenue, profitability, and diluted EPS in the fourth quarter. I am incredibly proud of our team’s collective impact on the business and the care they showed our guests throughout the holiday season, positioning us to finish fiscal 2024 ahead of our expectations."
She continued, “I am incredibly optimistic about the future of Ulta Beauty, as I believe we have the right elements to drive our success–a strong business model, an ambitious long-term plan, and passionate associates who bring our brand to life for our guests every day. Fiscal 2025 will be a pivotal year as we make purposeful investments to fuel our future growth and move quickly to optimize our business. 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."
Ulta Beauty's Fiscal 2025 Sales Forecast
Ulta is forecasting full-year fiscal 2025 net sales of $11.5-11.6 billion, a 0-1% gain in comparable sales.
