Ulta Beauty ends year with sales dip, names new CEO

By

Jennifer Braun

Published
Mar 12, 2021

Bolingbrook, Illinois-based cosmetics retailer Ulta Beauty, Inc. announced a 16.8 percent decline in fiscal 2020 net sales on Thursday, on news that CEO Mary Dillon will be stepping down in June.

For the fiscal year ended January 30, 2021, the company’s sales totalled $6.2 billion compared to $7.4 billion in fiscal 2019. 

Comparable sales for the year fell 17.9 percent compared to an increase of 5 percent in fiscal 2019, while transactions declined 24.5 percent, and average ticket increased 8.8 percent. The beauty retailer's net income was $175.8 million, compared to $705.9 million in fiscal 2019.  

In the fourth quarter, net sales decreased 4.6 percent to $2.2 billion compared to $2.3 billion in the fourth quarter of fiscal 2019. 

Comparable sales were down 4.8 percent compared to an increase of 4 percent in the fourth quarter of fiscal 2019. Meanwhile, transactions declined 12.2 percent, and average ticket increased 8.3 percent.

“The Ulta Beauty team delivered better-than-expected results for the fourth quarter. Strong, enterprise-wide execution of our plans, combined with improving trends in consumer demand, resulted in solid results across multiple metrics, including sales, transactions and profitability,” said Dillon. 

Ulta said that company president Dave Kimbell will succeed Dillon as chief executive officer and will be nominated to stand for election to the company’s board of directors at the 2021.

Looking forward, Ulta plans to open approximately 40 net new stores and execute approximately 21 remodel or relocation projects. Revenue is expected to be between $7.2 billion and $7.3 billion, with earnings per share in the range of $8.85 to $9.30 and comparable sales growth between 15 and 17 percent.

Moreover, the company plans to spend $850 million on share repurchases, incur capital expenditures between $200 million and $250 million and record depreciation and amortization expenses of $270 million to $280 million.

“We are encouraged by the momentum we are seeing in store traffic trends,” added Dillon. “Although our visibility as to when demand will fully recover is limited, we are confident our business will continue to strengthen in fiscal 2021, as Covid-19 vaccines become more accessible."