Ulta Beauty stock tumbled Friday after the salon/cosmetics chain late Thursday fell short of expectations for Q2 results and cut its full-year outlook.
Ulta Beauty reported a nearly 12% decline in earnings to $5.30 per share, missing FactSet estimates of $5.45 per share. Net sales rose less than 1% to $2.55 billion, also below expectations of $2.6 billion.
The results mark two consecutive quarters of accelerating earnings declines.
"While we are encouraged by many positive indicators across our business, our second-quarter performance did not meet our expectations, primarily by a decline in comparable store sales," CEO Dave Kimbell said in the release. He added the company is undertaking actions to address the trends. "We are focused on driving stronger sales and traffic and continuing to exercise financial discipline," Kimbell continued.
Comparable sales fell 1.2% for the quarter, compared to an 8% increase last year. Ulta Beauty reported a 1.8% decrease in transactions, but the average ticket rose 0.6%. Inventories at the end of the quarter stood at $2 billion, up 10.1% from last year.
Ulta Beauty lowered its 2024 outlook on results. The cosmetic company now sees sales ranging from $11 billion to $11.2 billion, vs. its prior outlook of $11.5 billion to $11.6 billion. Comparable sales are expected to be flat or decline 2%. Ulta previously guided a 2% to 3% increase. The retailer expects earnings between $22.60 per share and $23.50 per share, down from its earlier forecast for $25.20 to $26 per share.
Rival ELF Beauty also fell sharply following its early August report as its sales outlook was short of aggressive forecasts.
Ulta Beauty Stock
ULTA stock fell 4% Friday. Shares veered more than 8% lower in premarket trade.
The stock is trading near its mid-August lows, which marked its weakest level since 2021.
Ulta Beauty unraveled 28% this year.
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