Earnings Results: Ulta shares sink after reporting lower sales, profit and CEO change

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Ulta Beauty Inc. said Thursday it continued to feel the effects of the pandemic, posting lower fourth-quarter sales and profit year over year. It also announced that Chief Executive Mary Dillon will be replaced by company President David Kimbell.

Ulta ULTA, +1.27% shares, which hit an intraday high Thursday, are down more than 10% after hours, after rising 1.3% in the regular session to close at $347.50. 

The company reported fourth-quarter net income of $171.5 million, or $3.03 a share, compared with $222.8 million, or $3.89 a share, in the year-ago period. Adjusted earnings were $3.41 a share, adjusted for impairment, restructuring and other costs, including the Illinois-based company’s suspension of an expansion to Canada. Revenue fell to $2.2 billion from $2.3 billion in the year-ago quarter.

Analysts surveyed by FactSet had forecast earnings of $3.73 a share on revenue of $2.29 billion.

Despite reduced traffic to its stores in the fourth quarter, Dillon said in a statement that the company has “good operational momentum. We are encouraged by the momentum we are seeing in store traffic trends. Although our visibility as to when demand will fully recover is limited, we are confident our business will continue to strengthen in fiscal 2021, as COVID-19 vaccines become more accessible.”

For the full year, the company posted net income of $175.8 million on revenue of $6.2 billion, compared to profit of $705.9 million on $7.4 billion in revenue in 2019.

Dillon will become chair of the board of directors, and Kimbell will take over as CEO in June. Kecia Steelman, now chief store operations officer, will be promoted to chief operating officer.

Ulta shares have risen about 21% so far this year, and 75% in the past 52 weeks.

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