Key things
- Shares of Ulta Beauty tumbled after warning of slowing growth.
- The company lowered its full-year operating margin outlook.
- Its stock was the worst performer on the S&P 500 on Friday, with shares down 13.4%.
Ulta Beauty (ULTA) was the best-performing stock in the S&P 500 on Friday, as shares fell 13.4% after the beauty supply chain discontinued operations for the year. operating margin and warned that its recent growth boom would moderate.
Ulta Beauty reported first-quarter fiscal 2023 earnings of $6.88 per share, with revenue up 12.3% to $2.63 billion. Both were slightly above forecasts. Same store sale, which includes online purchases, advanced 9.3%, just below estimates. The average ticket fell by 1.5%.
CEO David Kimbell said that during the quarter, “store traffic remained healthy, member growth showed continued strength, we achieved growth across key categories and 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 experienced over the past two years will moderate and eventually return to the upper end of the historical average.”
Ulta Beauty now anticipates a slight increase in full-year sales over its previous outlook, but expects an operating margin of 14.5% to 14.8%, compared with a prior range of 14.7% to 15%.
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