Ulta Beauty Q4 sales, profit fall; to open 40 stores this year

Ulta Beauty continued to feel the impact of the pandemic in the fourth quarter as its profit and sales fell amid a 12% decline in transactions.

Looking ahead, the beauty giant, which announced that CEO Mary Dillon will step down in June and be succeeded by president Dave Kimbell, struck a positive note, saying it was encouraged by the momentum it is seeing in-store traffic trends. Ulta will open approximately 40 new stores this year and remodel or relocate approximately 21 locations.

“We continue to be positive about the outlook of physical retail,” said Kimbell on the company’s earnings call. “The 40 stores we are opening we feel good about. We see plenty of growth ahead of us.”

Ulta reported net income of $171.5 million, or $3.03 per share, for the quarter ended Feb.1, compared with $222.7 million, or $3.89 per share, in the year-ago period, Excluding items, Ulta earned $3.41 per share, topping the $2.35 per share expected by analysts. 

Net sales fell 4.6% to $2.2 billion. Same-store sales fell 4.8%, compared to an increase of 4% in the year-ago quarter. Transactions declined 12.2%. The average ticket increased 8.3%

For the full year, net sales decreased 16.8% to $6.2 billion. Comparable sales decreased 17.9% compared to an increase of 5.0% in fiscal 2019. During fiscal 2020, transactions declined 24.5%, and average ticket increased 8.8%. Net income was $175.8 million compared to $705.9 million in fiscal 2019. Adjusted net income was $264.0 million compared to $688.3 million in fiscal 2019.

“Fiscal 2020 was a difficult year, and I am proud of how our teams navigated the unprecedented challenges with agility and purpose,” said Dillon. “We begin fiscal 2021 with a strong foundation in place and good operational momentum. We are confident our business will continue to strengthen in fiscal 2021, as COVID-19 vaccines become more accessible.”

The company ended fiscal 2020 with 1,264 stores.