Ulta issues weak guidance, citing consumer uncertainty, rising competition and company missteps

Ulta issues weak guidance, citing consumer uncertainty, rising competition and company missteps


Ulta Beauty on Thursday issued weak guidance for the year ahead as it navigates a series of internal missteps, rising competition and what it called “consumer uncertainty.”

The retailer, which appointed Kecia Steelman as its new CEO in January, said it’s expecting comparable sales to be flat or grow 1% in 2025, while analysts had anticipated they would rise by 1.2%, according to StreetAccount. 

It’s expecting full-year earnings to be between $22.50 and $22.90, lower than expectations of $23.47, according to LSEG. 

Ulta is the latest company to forecast a rocky year ahead. While it factored uncertain consumer spending into its guidance, the retailer is also navigating a series of company-specific challenges and views 2025 as a transition year. Fixing those issues will cost money, which is part of the reason why it’s expecting profits to be lower than Wall Street anticipated in the year ahead.

“I’ve shared our plan to make important guest-facing investments, which are necessary to improve our competitiveness and re-accelerate long term share growth,” said Steelman on a call with analysts. “These investments will pressure profitability in 2025 but we believe they are critical to driving long-term sustainable growth in a competitive, innovative category.”

Shares rose 6% in extended trading.

Here’s how the beauty retailer did in its fiscal fourth quarter compared with what Wall Street was anticipating, based on a survey of analysts by LSEG:

  • Earnings per share: $8.46 vs. $7.12 expected
  • Revenue: $3.49 billion vs. $3.46 billion expected

The company’s reported net income for the three-month period that ended Feb. 1 was $393 million, or $8.46 per share, compared with $394 million, or $8.08 per share, a year earlier.

Sales dropped to $3.49 billion, down about 2% from $3.55 billion a year earlier. Like other retailers, Ulta benefited from an extra selling week in the year-ago period, which has negatively skewed results. 

Beauty has been one of retail’s brightest spots over the last couple of years, but Ulta has fallen behind due to a series of self-inflicted challenges. The company’s business has become more complex as it has grown, and Ulta has stumbled when launching new fulfillment choices, such as buy online, pickup in store, same-day delivery and ship from store.

“As a result, our in-store presentation and guest experience today are not as strong as we would like,” said Steelman. “These are opportunities well within our control.”

In January, Ulta announced that its longtime CEO Dave Kimbell would be replaced by its then-Chief Operating Officer Steelman, who has been with the retailer for more than a decade. Her experience as an operations guru makes her well suited to tackle some of the execution issues that have plagued Ulta.

During her first earnings call as CEO, Steelman was candid about what Ulta is doing right and what it’s doing wrong. She said the company will spend the next year resetting its business and working to take back the market share that it has lost.

“The competitive environment in beauty has never been more intense,” said Steelman. “For the first time, we lost market share in the beauty category in 2024.”

During Ulta’s holiday quarter, comparable sales climbed 1.5%, beating expectations of 0.8% growth, according to StreetAccount. Customers spent more during the quarter, resulting in a 3% rise in average ticket, but fewer shoppers came to Ulta’s stores to buy beauty products. Transactions during the quarter decreased by 1.4%. 

Part of that is likely because so many more companies are expanding into beauty. Not only does it compete with rival Sephora, but also mass retailers like Macy’s, Walmart and Amazon have made beauty a cornerstone of their strategies and have all expanded their selections of makeup and skincare products.

Last year, Ulta warned of a cooling beauty market, but companies like E.l.f. Beauty and Oddity didn’t see similar dynamics, and beauty sales remained strong at retailers like Macy’s and Target. 

In the meantime, Ulta has focused on boosting profitability. It managed to grow earnings during the quarter, even with one less selling week.



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