Tuesday, 23 April 2024
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Ulta Beauty stock drops as company sees ‘broad-based’ slowdown By Investing.com

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Shares of Ulta Beauty (NASDAQ:) tumbled more than 13% Wednesday after the company’s appearance at the JPMorgan Retail conference.

The company noted that external data points reflect a slowdown at the start of the year.

“What we’re seeing right now as we’re 2 months into our fiscal year, we have seen a slowdown in the total category,” said David Kimbell, Ulta Beauty’s CEO. “The category has grown. We came into the year and we talked about this on our call a few weeks ago, with expecting the category to moderate.”

“What we’ve seen so far is a slowdown in the total category across price points and segments,” he added. “That’s a bit earlier and a bit bigger than we thought. Still growing, still a lot of engagement, all those things that I’ve had, but we’ve seen this growth rate come down probably faster than we anticipated.”

The company’s CEO noted that “all external data points are reflecting a slowdown” across price points and they anticipated the moderation coming into the year.

Kimbell acknowledged that the competitive environment is intense, stating that they are feeling it, particularly in a couple of areas, losing share in prestige makeup and being challenged in hair.

However, he added the company has held its share across the total beauty category, gaining share in areas such as prestige skin and fragrance.

“There’s some real strength there,” continued Kimbell. “We’re working on balancing that and find the growth.” Even so, he stated that the slowdown the company is seeing is “broad-based across categories and price cuts.”

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