Despite the beauty retailer’s efforts to boost sales through steep discounts, inflation-weary consumers cut back spending on discretionary items such as cosmetics and hair care products.
Although pressure from retail shrink, where inventory is lost or damaged due to theft and breakage, has risen over the past few years, it persists as a challenge for retailers with several companies flagging an impact on margins.
Ulta Beauty now expects its annual operating margin to range between 14.0% and 14.3%, down from 15.0% reported in 2023.
The company forecast annual adjusted earnings per share between $26.20 and $27 per share, the mid-point of which fell below analysts’ average estimate of a profit of $27 per share, according to LSEG data.
It expects fiscal 2024 revenue to be between $11.7 billion and $11.8, largely above LSEG estimates of $11.69 billion.
The beauty retailer reported a profit of $8.08 per share for the fourth quarter ended Feb. 3, compared with expectations of $7.53.
Quarterly revenue rose about 10% year-on-year to $3.6 billion, ahead of analysts’ expectations of $3.53 billion.
Shares of the Illinois-based company hit an intra-day record high on Thursday before closing down at $565.44. The stock has surged around 15% in 2024.
Source: Economy - investing.com
