In her first earnings call as Ulta Beauty’s President and CEO, Kecia Steelman discussed the retailer’s sales decline amid “intense” competition, and her multi-pronged plans to jumpstart decelerating sales.
Steelman, who was promoted following CEO Dave Kimbell’s retirement in January, said last year was the first where Ulta lost beauty category share.
“I am aware of the challenges that we face,” she said. “Some of them are external, while others we own…It’s clear to me that how we’ve operated must change to ensure that we capture the opportunities in front of us.”
Blush with greatness: On the call, Steelman announced a new plan, Ulta Beauty Unleashed, highlighting efforts like brand building (focused on exclusive brand partnerships including Beyoncé’s hair care brand Cécred), personalization, and digital acceleration. It’ll also grow its wellness assortment, expand its international presence, and boost its retail media network, she said. The plan also involves organization changes, like shifting chief store operations officer Amiee Bayer-Thomas to the newly created chief retail officer role.
The company also plans to open a new invitation-only e-commerce marketplace in the second half of 2025, establishing an “even broader assortment in a lower-risk way,” Steelman said. Consumers will be able to earn loyalty points for their purchases, and return them at Ulta stores.
By the numbers: In Q4, Ulta’s net sales dropped 1.9% YoY to $3.5 billion, while comparable sales rose 1.5%, a YoY deceleration, as consumers spent more, but less often. E-commerce sales rose in the mid-single digits.
Fragrance had the strongest performance, notching double-digit comparable growth, followed by skin care, boosted by body care. (Both categories were the subject of inventory investments in 2024, CFO Paula Oyibo said.) Makeup saw a mid-single digit decrease, which Oyibo attributed to declines in mass.
For the full year, net sales increased 0.8% to $11.3 billion with the help of 66 new store openings, with plans for 60 more this year. Comparable sales increased 0.7%, a much smaller rise than fiscal 2023’s 5.7% jump.
Ulta forecasted net sales of $11.5 billion to $11.6 billion for fiscal 2025, with comparable sales anticipated to be up 0%–1%.
According to Placer.ai, Ulta’s visit growth rose just 1.9% YoY in 2024, and 2.5% YoY in Q4, representing a foot traffic deceleration. Visits from wealthy, suburban, and young consumers—the beauty retailer’s core consumer bases—were also down.
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