MAJOR retailer Ulta Beauty confirmed a closure and revealed stores are “not as strong” as rival Sephora.
The company CEO announced their sad news this week amid “consumer uncertainty” and poor sales projections.
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The industry giant, which appointed Kecia Steelman as its new CEO in January, said on Thursday they are only expecting a boost in sales of 1% this year.
Annual profits are also predicted to fall lower than originally anticipated.
Ms Steelman said on a call with analysts: “I’ve shared our plan to make important guest-facing investments, which are necessary to improve our competitiveness and re-accelerate long term share growth.
“These investments will pressure profitability in 2025 but we believe they are critical to driving long-term sustainable growth in a competitive, innovative category.”
The retailer’s reported net income for the three-month period that ended February 1 was $393 million as opposed to $394 million, the year prior.
Meanwhile, sales plummeted to $3.49 billion, down about 2% from a year earlier.
It comes as Ulta has struggled to keep up with demand, including a lack of online shopping, in-store collections and same-day delivery options.
“As a result, our in-store presentation and guest experience today are not as strong as we would like,” Ms Steelman added.
“These are opportunities well within our control.”
Ms Steelman has been open and honest since become CEO in January, about the missteps taken prior to her new role.
During her first earnings call as CEO she vowed Ulta will focus on their restructuring and transformation this year.
“The competitive environment in beauty has never been more intense,” she said.
“For the first time, we lost market share in the beauty category in 2024.”
Figures reported by StreetAccount revealed the company sales did hike by 1.5% during their last quarter – which was higher than expected.
But this is not enough to compete with their rival Sephora, as well as other major names such as Walmart and Macy’s.
Ulta Beauty’s former CEO, Dave Kimbell, said consumer spending had slowed and expected the company’s sales to grow by only a single digit last year.
While the company was prepared for this, Kimbell noted that it is “a bit earlier and a bit bigger” than they predicted.
“We came into the year — and we talked about this on our [earnings] call a few weeks ago — expecting the category to moderate. It has [had], as I said, several years of strong growth,” he said.
“We did not anticipate it would continue at the rate that it’s been growing.”
Kimbell said a dip in consumer spending has been more significant for high-end makeup and haircare products.
However, the company does plan to open 200 more new stores in a bid to rescue falling sales.
Ulta Beauty announced its expansion plans for “2026 and beyond”.
The retail giant hopes net sales will grow from 4% to 6% as a result.
Ulta met its previously set goals of hitting a whopping $10 billion in revenue in 2022 – just a year after targets were put down.
In recent years, Ulta has only opened a few stores, according to reports in Retail Dive.
The plans will see around 200 Ulta stores open over a three year period – totaling around 66 a year.
Ulta also wants to grow its loyalty program to 50 million members by 2028.
It is the largest specialty beauty retailer in the US, with more than 1,437 stores across the country, as well as its website ulta.com.
In addition to beauty products the retailer offers online tutorials, buying guides, personalized skincare recommendations and beauty tips.
Customers love its products, such as the budget-friendly gel that transforms unruly eyebrows.
While shoppers can’t get enough of its sample kits that cost $30 and less.
And, Beyonce is making a major move in the beauty world, bringing her Cécred hair care line to the retailer.
Ulta loyalty program ‘upgrades’ coming in 2025
By Lisa Burn
ULTA Beauty is set to expand its loyalty program, not just in numbers but in the amount of personalization it offers to its customers.
The retailer is planning upgrades to the scheme this year as part of a plan to be more customer-centered.
Speaking to Retail Dive, Ulta vice president of digital products Josh Friedman said:
“You need teams to think about the customer.”
“Not about the channel, not about the product, not about the offer, but about the customer and then where all the other things lead — and that’s a big change.”
The company wants to collect more information from shoppers about how they use their beauty products to improve the level of personalization it offers them over the long term.
“Quite honestly, once checkout happens, customers are pretty forgetful about everything that happened before then unless it was negative,” said Friedman.
“They want rich post-purchase experiences and genuine messaging.”
“We’re doing things that build up your shopping habits and your preference and your loyalty to us without necessarily needing it to be a shopping trip,” he told the retail news site.
Currently more than 44 million customers are members of the Ulta Beauty Rewards program and 95% of sales go through it.
The program has three tiers – member, platinum and diamond.
Anybody can sign up for free membership, while platinum requires a spend of $500 per year and diamond $1,200 per year.
Loyalty scheme members earn points on their purchases, these can then be redeemed against products instore, on the website or through the app.
The Ulta Beauty Rewards program also gives customers $5 off when they sign up, as well as a free gift on their birthday.
