Ulta Beauty reported its fourth-quarter earnings on March 14, 2025, revealing a mixed outlook for the upcoming year. The beauty retailer’s results exceeded analyst expectations for the holiday quarter, but it provided lower-than-anticipated guidance for 2025, forecasting flat to 1% growth in comparable sales.
- Ulta Beauty expects weak 2025 performance.
- New CEO Kecia Steelman appointed in January.
- Earnings guidance lower than analyst expectations.
- Holiday-quarter results beat analyst forecasts.
- Increased competition from mass retailers.
- Focus on boosting profitability and growth.
Ulta’s fiscal fourth-quarter earnings showed a net income of $393 million, or $8.46 per share, compared to $394 million, or $8.08 per share, a year earlier. Revenue for the quarter was $3.49 billion, down 2% from $3.55 billion in the same period last year. This decline is attributed to one less selling week in the current fiscal year, which impacted year-over-year comparisons. Despite these challenges, shares rose 6% in after-hours trading following the earnings announcement.
Key performance metrics included:
- Earnings per share: $8.46 vs. $7.12 expected
- Revenue: $3.49 billion vs. $3.46 billion expected
New CEO Kecia Steelman, who took over in January, expressed confidence in the company’s future despite the anticipated challenges. She stated that fiscal 2025 would be crucial for making investments aimed at growth. Steelman emphasized the need for ongoing efforts to optimize the business and reignite momentum, although she did not provide specific details on current Trends or factors influencing the guidance.
During the holiday quarter, comparable sales increased by 1.5%, surpassing expectations of 0.8% growth. However, the average ticket price rose by 3%, while the number of transactions fell by 1.4%. This trend reflects increased competition from other beauty retailers, including Sephora and mass retailers like Walmart and Amazon, which have expanded their beauty product offerings. Despite prior warnings about a cooling beauty market, some companies in the sector have not experienced the same downturn.
In summary, Ulta Beauty’s fourth-quarter results highlight both strengths and challenges as it prepares for a pivotal year ahead. With a focus on strategic investments, the company aims to navigate a competitive landscape while maintaining profitability.
