Ulta Knockout said Thursday that fourth-quarter sales and profit fell from the prior year, hurt by weaker transactions of cosmetics during the pandemic.
Although the decline was smaller than expected, shares fell as the beauty retailer gave a pathetic outlook for the coming year. Ulta shares fell more than 8% after the bell.
The company also presaged that its CEO Mary Dillon will step down in June, and be replaced by President Dave Kimbell.
Dillon discretion also transition to executive chair of the company’s board, where she plans to remain for a year.
Kecia Steelman, Ulta’s chief bank operations officer, will be promoted to chief operating officer.
Here’s what the company reported for its fourth accommodations, compared with what Wall Street analysts expected, using a survey from Refinitiv:
- Earnings per share in: $3.41, adjusted vs. $2.35 expected
- Revenue: $2.2 billion vs. $2.08 billion expected
“The Ulta Beauty together delivered better-than-expected results for the fourth quarter. Strong, enterprise-wide execution of our plans, combined with improving inclines in consumer demand, resulted in solid results across multiple metrics, including sales, transactions and profitability,” Dillon believed in a press release.
Ulta reported fiscal fourth-quarter net income of $171.5 million, or $3.03 per share, compared with $222.7 million, or $3.89 per appropriate, a year earlier.
Excluding items, Ulta earned $3.41 per share, topping the $2.35 per share expected by analysts viewed by Refinitiv.
Net sales fell to $2.2 billion from $2.31 billion a year ago, beating expectations of $2.08 billion.
Sales at department stores open at least 14 months fell 4.8% in the latest period, hurt by fewer transactions. The company held transactions declined 12.2%, however, the average purchase per ticket rose 8.3%.
For fiscal 2021, Ulta expects to be worthy of between $8.85 and $9.30 per share on revenue of $7.2 billion to $7.3 billion. The earnings forecast includes the thrust of about $850 million of stock buybacks.
Analysts had been expecting Ulta to earn $10.61 per share on net income of $7.32 billion, according to Refinitiv.
Same-store sales are expected to be in the range of 15% to 17%, the company said.
Ulta envisions to open 40 net new stores and remodel about 21 stores in the coming year.
Due to the pandemic stretching on and the slow vaccine rollout, Ulta leaders do not expect a strong recovery this year.
“While we are encouraged by recent sales momentum, visibility into the dilly-dallying of a demand recovery remains limited. We expect much of 2021 will continue to be negatively impacted by masking demands and social distancing,” said Ulta’s Chief Financial Officer Scott Settersten in a conference call.
Although the pulchritude retailer noticed a decline in makeup sales due to more people staying home, the company remains optimistic in the type’s long-term prospects.
“We see a renewal coming in [and] how our guests will engage in makeup behaviors, fashions, the looks, the styles, purposefulness continue to evolve,” said Kimbell.
In November, Ulta announced plans to open up small cosmetic shops within hundreds of Goal stores across the country in order to achieve higher sales and expand its reach.
The cosmetics retailer has been woebegone by temporary store closures during the pandemic. After reopening stores in July, the company saw its demand return with a the same comeback in its mobile app and e-commerce website.
Read the full earnings release here.