Steelman also said that Ulta’s new fulfillment options such as buy-online and pick-up in-store, ship from store and same-day delivery have results in execution challenges, “particularly in product transitions and launches, as we leverage new tools and processes.”
Ulta will spend 2025 investing in efforts to improve its business.
“Fiscal 2025 will be a pivotal year as we make purposeful investments to fuel our future growth and move quickly to optimize our business,” Steelman stated in the earnings release. “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.”
On the call, Steelman outlined a plan called “Ulta Beauty unleashed.” The goals include improving in-store presentation, inventory levels and product assortment.
“We are focusing to ensure the guest is at the center of everything we do, and we intend to move faster, invest strategically and optimize our business to achieve our long term goals, to drive profitable growth and market share,” she told analysts.
Fourth Quarter
The company’s net income totaled $393 million, or $8.46 per share, for the quarter ended Feb.3, compared with $394 million, or $8.08 per share, in the year-ago period. Analysts’ had expected earnings of $7.12 per share.
Sales dropped 1.9% to $3.49 billion, topping analysts’ estimates of $3.46 billion. (Similar to other retailers, Ulta benefited from an extra selling week in the year-ago period.)
Comparable sales rose 1.5%. Transactions during the quarter fell by 1.4%, but the average transaction was up 3%.
For the full year, net sales increased 0.8% to $11.3 billion, primarily due to new store contribution, partially offset by the benefit of the 53rd week of sales in fiscal 2023. Comparable sales increased 0.7% compared to an increase of 5.7%, driven by a 1.1% increase in average ticket and a 0.4% decrease in transactions.
For its current fiscal year, Ulta expects comparable sales to be flat or up to 1%, with earnings per share of $22.50 to $22.90. The metrics are below Street estimates.
“The operating environment continues to be dynamic, and as we navigate ongoing consumer uncertainty, we believe it is prudent to take a cautious approach to our guidance for fiscal 2025,” Ulta CFO Paula Oyibo said during the earnings call.
During fiscal 2024, Ulta opened 66 new stores, relocated two stores, remodeled 41 stores, and closed six stores, for a total of 1,445 stores.