Ulta Beauty Shares Sink as the Beauty Products Retailer Warns of Slowing Growth

By
Bill McColl
Bill McColl
Full Bio

Bill McColl has 25+ years of experience as a senior producer and writer for TV, radio, and digital media leading teams of anchors, reporters, and editors in creating news broadcasts, covering some of the most notable news stories of the time.

Learn about our editorial policies
Published May 26, 2023
Ulta Beauty Makeup

David Dee Delgado / Stringer / Getty Images

Key Takeaways

  • Ulta Beauty shares tumbled as it warned about slowing growth.
  • The company cut its outlook for full-year operating margin.
  • Its stock was the worst performer on the S&P 500 on Friday as shares fell 13.4%.

Ulta Beauty (ULTA) was the worst-performing stock in the S&P 500 on Friday as shares fell 13.4% after the beauty products store chain cut its full-year operating margin guidance and warned that its recent boom in growth would moderate.

Ulta Beauty posted fiscal 2023 first quarter profit of $6.88 per share, with revenue up 12.3% to $2.63 billion. Both were slightly above forecasts. Same-store sales, which include online purchases, advanced 9.3%, just below estimates. The average ticket fell 1.5%.

CEO David Kimbell indicated that during the quarter, “store traffic remained healthy, member growth showed continued strength, we delivered growth across key categories, and we strengthened engagement with the Ulta Beauty brand.”

However, he explained that while the importance of overall skin care and wellness was expected to continue, “the high level of growth the company has seen in these last two years will moderate and ultimately go back to the high end of the historical average.”

Ulta Beauty now projects a slight increase in full-year sales from its previous guidance, but it sees operating margin of 14.5% to 14.8% compared to the earlier 14.7% to 15%.

Ulta Beauty Price

YCharts
Article Sources
Investopedia requires writers to use primary sources to support their work. These include white papers, government data, original reporting, and interviews with industry experts. We also reference original research from other reputable publishers where appropriate. You can learn more about the standards we follow in producing accurate, unbiased content in our editorial policy.

  1. Ulta. “Ulta Beauty Announces First Quarter Fiscal 2023 Results.”

Compare Accounts
×
The offers that appear in this table are from partnerships from which Investopedia receives compensation. This compensation may impact how and where listings appear. Investopedia does not include all offers available in the marketplace.
Provider
Name
Description