Ulta Beauty, Inc. (NASDAQ:ULTA) shares fell 1% on Friday. Stocks have fallen 15% over the past three months. Retailers pilot dynamic consumer environments and rapidly changing, highly competitive beauty situations, which presents a considerable challenge. The company has set out many strategies to tackle these issues and drive the growth of its business.
Ulta Beauty unleashed
As mentioned in the recent revenue call, Ulta Beauty is seeing a fundamental change in the beauty landscape. As this segment continues to evolve, customer expectations are rising and competition is intensifying. Against this backdrop, the company lost market share in the beauty category and faced challenges in store execution. We identify areas that need to be changed and work on improving them.
Named Ulta Beauty Unleashed, Ulta’s business plan centers around three main priorities: driving growth in core businesses, expanding new supplementary businesses, and re-aligning future foundations.
The top priorities driving the growth of our core business are primarily focused on brand building, personalization and digital acceleration. The company plans to improve its assortment by focusing on exclusive, emerging and established brands. We are also working to use a more personalized approach to promote better engagement with guests and build digital features with enhanced new features in our apps and websites.
The second priority is to expand new and supplementary businesses to take advantage of growth opportunities and maintain resilience in a rapidly changing environment. In 2025, Ulta’s main initiative is to focus more on the wellness category, expand its e-commerce presence, provide a wider range of products to its customers, expand its international presence, and launch a new market that will help it strengthen Ulta’s beauty media.
A third priority is to reorganize the foundation for the future by streamlining the cost structure, focusing resources on higher growth areas, and making changes to ensure smooth operation within the organization.
Ulta is optimistic about the strength and resilience of the beauty category and anticipates healthy consumer engagement in this segment. It believes that its business plan will build on its strengths and help it drive growth in the long term. The company’s long-term targets include revenue growth rates of 4-6% and double-digit EPS growth rates.
Q4 Performance
In the fourth quarter of 2024, Ulta Beauty net sales fell nearly 2% year-on-year to $3.5 billion. Equivalent sales increased by 1.5%. Total margin rose to 38.2% from 37.7% last year, earnings per share rose 5% to $8.46.
Outlook
For fiscal year 2025, Ulta expects net sales of $11.5-11.6 billion and comparable sales of 0-1%. The EPS is expected to be $22.50-22.90.
