- Jean-Marc Giboux
- Ulta Beauty plummeted as much as 25% in early Friday trading after the company reported worse-than-expected revenue and profit figures for its second quarter.
- The beauty retailer shifted its yearly forecast lower as well, citing a lack of “newness and innovation” in its key cosmetics business.
- CEO Mary Dillon noted an upcoming expansion with exclusive partner Kylie Jenner will bring her Kylie Skin brand to its stores later in the third quarter.
- Watch Ulta trade live here.
Ulta Beauty fell as much as 25% in early Friday trading after the company posted second-quarter revenue, profit, and same-store sales that fell under analysts’ expectations.
The beauty retailer revised its yearly guidance lower as well. Though the company saw its total number of sales rise in the second quarter, it shifted its yearly revenue and profit forecasts lower, citing “headwinds we are currently seeing in the US cosmetics market.” The updated guidance fell short of the lowest analyst estimate, and three firms downgraded Ulta’s stock Friday morning.
Here are the key numbers:
Earnings per share: $2.76, versus the $2.79 estimate
Revenue: $1.667 billion, versus the $1.679 billion estimate
Same-store sales growth: 6.2%, versus the 6.7% estimate
2019 earnings per share forecast: between $11.86 and $12.06, versus prior range of $12.83 to $13.03.
CEO Mary Dillon told analysts the slowdown in key metrics has been primarily driven by a lack of “newness and innovation” in the cosmetics industry. Skincare products offset some losses in Ulta’s cosmetics business, but “ongoing volatility” in the company’s most popular segment prompted the lowered forecast, the executive added.
“Our differentiated model is winning in the marketplace, and we continue to invest in building the long-term capabilities that will further expand our leadership position in the dynamic beauty industry,” Dillon said in an earnings call.
Dillon also highlighted upcoming collaborations with pop-culture figures. Ulta’s exclusive deal with Kylie Jenner’s Kylie Cosmetics line will expand to include Kylie Skin products in the next quarter. Future cosmetics partnerships with Kim Kardashian West’s KKW Beauty brand and Milly Bobby Brown, of “Stranger Things” fame, would “have a strong appeal for our guests,” the CEO said.
She ended the call by highlighting improvements in shipping time, progress toward the company’s two-day delivery goal, and a partnership with AfterPay to allow customers to pay for items in four installments.
Ulta closed at $337.45 per share Thursday, up nearly 38% year-to-date. The stock’s subsequent fall wiped out as much as $5.1 billion from the company’s market cap in early trading.
The Bolingbrook, Illinois-based company has 14 “buy” ratings, eight “hold” ratings, and one “sell” rating from analysts, with a consensus price target of $301.88, according to Bloomberg data.
Now read more markets coverage from Markets Insider and Business Insider:
- Markets Insider