Ulta Beauty has reported fourth quarter 2020 net sales of $2.2 billion, compared to $2.3 billion in the previous year, a 4.6% decline. Ulta's full-year net sales were $6.2 billion, compared to $7.4 billion in the previous year, representing a 16.8% decline. At the same time, the retailer announced that Dave Kimbell, president, will succeed Mary Dillon as CEO and will be nominated to stand for election to the company’s board of directors, effective June 2, 2021.
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During the fourth quarter, the company's gross profit decreased 4.4% to $771.0 million, compared to $806.9 million the previous year.
Q4 operating income decreased to $224.3 million, or 10.2% of net sales, compared to $287.8 million, or 12.5% of net sales, in the fourth quarter of fiscal 2019. Adjusted operating income was $254.7 million, or 11.6% of net sales.
Net income for Q4 was $171.5 million, compared to $222.7 million in the fourth quarter of the previous year.
Full-year gross profit decreased to $1.9 billion, compared to $2.7 billion in fiscal 2019. As a percentage of net sales, gross profit decreased to 31.7% compared to 36.2% in fiscal 2019, primarily due to channel mix shifts and the deleverage of fixed costs and salon services due to the impact of lower sales.
Operating income decreased to $236.8 million, or 3.9% of net sales, compared to $901.1 million, or 12.1% of net sales, in fiscal 2019. Adjusted operating income was $352.5 million, or 5.7% of net sales.
Net income was $175.8 million, compared to $705.9 million the previous year. Adjusted net income was $264.0 million, compared to $688.3 million in the previous year.
Mary Dillon, CEO said:
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. I want to express my sincere appreciation to all Ulta Beauty associates for their continued flexibility, collaboration and unwavering commitment to our guests and each other.
Fiscal 2020 was a difficult year, and I am proud of how our teams navigated the unprecedented challenges with agility and purpose. We begin fiscal 2021 with a strong foundation in place and good operational momentum. We are strategically investing in our business to drive further market share gains, and, as separately announced today, we are beginning to execute a thoughtful succession plan that ensures we continue to benefit from strong, experienced leadership for the next chapter of growth. I remain excited about the long-term opportunity for Ulta Beauty, and I am confident we will continue to shape and lead the beauty industry for many years to come.
Ulta Beauty has announced that Dave Kimbell, president, will succeed Mary Dillon as chief executive officer and will be nominated to stand for election to the company’s board of directors, effective June 2, 2021.
Dillon will transition to the role of executive chair of the board of directors.
Kecia Steelman, currently chief store operations officer, will be elevated to the role of chief operating officer.
Kimbell joined Ulta as chief marketing officer in 2014 and continually expanded his leadership responsibilities. He was named chief merchandising and marketing officer in 2015 and ultimately assumed the role of president in 2019.
Steelman will oversee store and services operations, supply chain, Ulta Beauty at Target and other key initiatives.
Dillon intends to serve as executive chair for a one-year term and, with the board of directors, will continue to help guide strategy while supporting Kimbell in his transition.
As part of this transition, Ulta Beauty’s current chair, Robert DiRomualdo, will retire from the board after serving three years in the role of chair and 17 years total on the board.
The company also announced Lorna Nagler, who has served on the board since 2009, will become lead independent director, working with Dillon in her executive chair role.
Dillon said, “It has been the honor of my career to lead the Ulta Beauty family for the last eight years and a true joy to have been inspired by our dedicated associates and beauty-loving guests daily. Our strategies, culture and continuous innovation have strengthened our business model, ensuring we are well-positioned to continue leading the industry. Throughout my time with the company, I have worked closely with our board on strategic succession plans, and I believe now is the right time to begin a CEO transition. Dave is a world-class business leader with incredible passion, deep beauty expertise, unwavering drive and a values-based leadership style. The board, executive team and I could not be more thrilled to congratulate and support Dave as he takes this new role. There is no one better suited to unlock even more beautiful possibilities.”
Kimbell said, “I am humbled to serve as the next CEO of Ulta Beauty, succeeding Mary, whose leadership has been transformational, creating lasting impact across the beauty and retail industries. We will continue to build upon the foundation she set to ensure Ulta Beauty is a destination where every guest feels welcome and every associate can have a fulfilling career. I appreciate the support from Mary and our entire board of directors and look forward to leading with Kecia, our outstanding executive team and every Ulta Beauty associate through the lens of our well-established values and winning culture.”