Inside an Ulta shop area in New York.
Scott Mlyn|CNBC
Ulta Beauty is counting on brand-new brand name collaborations to improve delayed makeup sales.
Cosmetics represented 43% of Ulta’s overall sales in 2021, the greatest section share without a doubt, however they dipped from the year-earlier duration. The business stated throughout its fourth-quarter incomes report that brand names like Olaplex, Fenty and Supergoop must assist press efficiency in its flagship section.
Net sales increased 40% year over year in the year endedJan 30, to $8.6 billion, and increased 24% year over year throughout the financial 4th quarter to $2.7 billion, matching Wall Street expectations for both durations, according to Refinitiv agreement price quotes.
CEO Dave Kimbell stated as sales have actually recuperated from a 2020 downturn, the business’s makeup section has actually shown more unstable and dragged other classifications. The makeup organization felt higher changes from Covid- associated modifications in shopping and increasing costs for customers, he stated.
“As we look at the beauty category, even with these headwinds, we remain positive. The category is healthy. It is growing. It’s emotionally important and connected to our consumers,” Kimbell stated.
In August, the business opened its very first mini-shop areas through a collaboration withTarget Ulta has actually opened more than 100 stores within Target shops to date, and wishes to include another 250 areas this year.
Executives stated the collaboration has actually assisted trigger development in Ulta’s commitment program, Ultamate Rewards, which included 4 million members throughout the for an overall of 37 million.
The business’s growing benefits base lays a “foundation for ongoing momentum as 2022 reopens,” according to Barclays Capital expert Adrienne Yih.
“The combination of increasing brand awareness, the Target partnership, and new brand additions such as Olaplex, N1 de Chanel and Fenty, are driving new customer acquisition,” Yih stated in a research study note.
Ulta likewise has actually introduced a variety effort to support appeal brand names by and for customers who determine as Black, native and individuals of color. Fenty, established by pop star and business owner Rihanna, is among numerous Black- owned brand names that the seller has actually presented in current months.
“We’re not here just to get these brands on the shelf. It’s one thing to arrive on our shelves — it’s another thing to thrive. And that’s how we’re measuring success,” Kimbell stated on the business’s incomes call.
“We’re doing this to drive engagement with our guests and we’re seeing it for our brands. So we’re optimistic about beauty — about makeup, and BIPOC will be one of the elements that will help us drive growth going forward.”
Looking ahead to financial 2022, Ulta anticipates incomes per share of in between $1820 and $1870 on earnings of in between $9.05 billion and $9.15 billion. Analysts had actually anticipated 2022 incomes per share of $1784 and earnings of $9.14 billion, according to Refinitiv.
Shares of Ulta fell almost 3% Friday following the incomes release and are up approximately 6% over the last 12 months.
Correction: Shares of Ulta fell almost 3%Friday An earlier variation misstated the stock relocation.
