Ulta Beauty still plans to open new stores this year, but not as many as previously planned.
In a business update, the beauty giant detailed new actions it is taking to preserve financial liquidity while its 1,254 stores remain temporarily closed, including reducing capital expenditures, particularly with regards to new store openings. Ulta said it is working on an adjusted plan for new store openings, relocations and remodel projects for 2020. It still expects to open some new stores this year, but not as many as the 75 it had previously announced.
In other actions, the company is:
• Reducing expense plans, suspending new hires, and deferring merit increases for all corporate and store associates;
• Moderating the pace of investments to build international capabilities, although it continues to expect to have an omnichannel presence in Canada in 2021;
• Aligning inventory receipts with current sales trends and prioritizing expense payment obligations to focus primarily on essential services; and
• Suspending its stock repurchase program.
Ulta noted that, since March 20, it has been a digital-only business. The company is giving employees actively working at the distribution centers a $2-per-hour wage premium.
“Although we do not expect to fully offset the revenue impact of our store closings, the multi-year, strategic investments we have made to enhance our omnichannel and supply chain capabilities, combined with the ongoing commitment of our distribution associates, have enabled us to support increased e-commerce demand and guest engagement,” said Mary Dillon, CEO.