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Ulta Beauty Q1 2020 Sales Drop 32.7%

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"While e-commerce sales exceeded our expectations, it was not enough to fully offset the impact of our store closings," CEO Mary Dillon stated.

Ulta Beauty has announced its financial results for Q1 2020.

The company reported that net sales decreased by 32.7% to $1.2 billion compared to $1.7 billion in Q1 2019.

Due to the COVID-19 (coronavirus) pandemic, Ulta Beauty has “taken multiple steps to reinforce its financial strength and preserve liquidity” including:

  • Drawing down $800.0 million under its $1.0 billion revolving credit facility.
  • Suspending new hires, and deferring merit increases for all corporate, store and salon associates.
  • Reducing marketing, travel and other discretionary expenses.
  • Moderating the pace of investment to support international capabilities.
  • Aligning inventory receipts with current sales trends.
  • Prioritizing payment obligations.
  • Reducing planned new store openings, relocations and remodel projects.
  • Suspending its stock repurchase program.

Ulta Beauty CEO, Mary Dillon, said, “Fiscal 2020 started off well, with good growth in comparable-store sales, market share and our Ultamate Rewards loyalty program through mid-March. However, the rapid escalation of COVID-19 resulted in significant disruption to our operations. For much of the first quarter, Ulta Beauty operated as a digital-only business, and while e-commerce sales exceeded our expectations, it was not enough to fully offset the impact of our store closings. As we have navigated the pandemic, our priority for every decision has been to protect the well-being of our associates and guests, and I am incredibly proud and appreciative of how quickly our teams adjusted to the dynamic environment.”

Dillon continued, “With safety continuing to guide our decisions, we have begun to reopen stores, and today more than 800 stores offer curbside pickup and more than 330 stores are open to guests. While it is still early, we have seen stronger-than-expected sales in reopened stores, and we’re seeing great engagement with our salon services, where available. At Ulta Beauty, we have a strong, differentiated operating model, a brand that is known and loved, and passionate and optimistic associates, and I am confident we will emerge from this crisis well-positioned to accelerate our market share gains and extend our competitive advantages.”