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Years of post-Covid growth in beauty may be coming to an end. On Thursday, retail giant Ulta Beauty reported a disappointing outlook for the year ahead after the second quarter of 2024 turned up a 1.2% decrease in comparable sales.
“Consumer behavior is starting to shift, as consumers increasingly focus on value and become more cautious with their spending,” said Ulta CEO Dave Kimbell on Thursday’s earnings call. In light of those changes, Ulta has adjusted its outlook for the fiscal year 2024 to result in net sales of $11 billion to $11.2 billion, down from its previous forecast of $11.5 billion to $11.6 billion.
Ulta cited an increasingly competitive retail landscape as contributing to the slowdown. According to Kimbell, more than 80% of Ulta stores were impacted by one or more competitive opening in recent years, and more than half were impacted by multiple competitive openings. During the second quarter of fiscal 2024, Ulta opened 17 new stores, in addition to relocating one store, remodeling nine stores and closing one other.
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