Ulta Beauty's Q1 fiscal 2024 net sales totaled $2.7 billion, a 3.5% increase year-over-year.
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Ulta Beauty's Q1 fiscal 2024 net sales totaled $2.7 billion, a 3.5% increase year-over-year.
Comparable sales for stores open at least 14 months and e-commerce sales increased 1.6%. Those results were driven by a 1.3% increase in transactions and a 0.3% increase in average ticket.
Ulta Results by Beauty Category
According to Ulta, makeup comp sales fell in the mid-single-digit range, while body care was strong, driven by the launch of Sol de Janeiro.
Mass skin care grew, driven by dermatologist-backed brands.
In addition, fragrance experienced double-digit growth, driven by Kylie Jenner's Cosmic, among other new launches.
Finally, hair care comp sales rose in the low single-digit range, driven by hair tools and mass and prestige hair care sales associated with seasonal sales events.
Retail Trends Shaping Ulta Results
Ulta's app reportedly accounted for 57% of its e-commerce sales in Q1, a significant uptick. At the same time, the retailer currently has 43.6 million Ulta Beauty Rewards members, a jump of 6% year-over-year.
"I remain confident in our differentiated model, the resilience of the beauty category and our ability to execute against our plans, but we have adjusted our annual guidance as we anticipate the dynamics we faced in the first quarter to continue for the balance of the year," said Dave Kimbell, chief executive officer.
On an analyst call, Kimbell added, "[W]e continue to expect the beauty category will grow in the mid-single-digit range this year, barring a major economic event."
But Ulta will face headwinds. Kimbell explained, "Today, there are significantly more places to buy beauty, especially prestige beauty, with more than 1,000 new points of distribution opened in the last two years. Additionally, prestige brands are expanding their online availability as digital penetration grows in the category. As a result, our market share has been more challenged for the last few quarters, particularly within the prestige beauty category."
Among the retailer's challenges is the power of the Sephora x Kohl's partnership, which has brought the LVMH-owned retailer closer in proximity with many Ulta locations.
The executive added, "[W]e estimate we maintained our share of the total U.S. beauty product industry this quarter. Based on Circana data, for the 13 weeks ended May 5th, 2024, we outpaced the growth of the mass market but lost share in prestige beauty primarily driven by pressure in makeup and hair. This prestige share pressure was concentrated in stores as we increased share in e-com for the quarter."
To that end, Ulta's full-year fiscal 2024 forecast points to year-over-year growth of 2-3%, totaling $11.5-11.6 billion, compared to a previously forecast rise of 4-5%.
Inside Ulta's Q1 2024 Results
Q1 2024 net income totaled $313.1 million, while gross profit increased 1.4% year-over-year to $1.07 billion.
Ulta's results come amid general strength in beauty. For calendar year Q1, Circana reported that U.S. beauty sales grew by more than $600 million year-over-year, with prestige sales revenue rising 9% and mass growing 2%.
Kimbell noted, “The Ulta Beauty team delivered net sales growth of 3.5% and comparable sales growth of 1.6% in a dynamic operating environment. I am proud of how our teams continued to execute our transformational agenda, adapt to a rapidly evolving marketplace, and thoughtfully manage expenses across the enterprise. We have a clear plan to accelerate our momentum and continue delivering a best-in-class assortment and engaging experiences for our guests. I remain confident in our differentiated model, the resilience of the beauty category, and our ability to execute against our plans, but we have adjusted our annual guidance as we anticipate the dynamics we faced in the first quarter to continue for the balance of the year.”