Dillon will become executive chairman of the company’s board of directors in June, the company said on Thursday. She will be replaced as CEO by Dave Kimbell, Ulta’s current president.
The announcement of Dillon’s move took some analysts by surprise.
“The departure of esteemed CEO Mary Dillon is a shock in the headlines,” said Stephanie Wissink, an analyst at Jefferies, in a note to customers on Thursday. “The moment is years ahead of expectations.”
During Dillon’s tenure as CEO,Ulta (ULTA)the company’s shares more than tripled. The company doubled its number of stores to more than 1,200, and joined the S&P and Fortune 500 listings, the company said. Ulta announced an agreement with Target last year to open cosmetic mini-stores within Target stores to try to sell makeup and skin care to more customers.
Ulta’s makeup sales were hit during the pandemic, as consumers spend more time at home and shop in stores less often. Last year, Ulta’s comparable sales, or in stores opened at least a year ago, fell 17.9% after a 5% increase in 2019.
Ulta said on Thursday that it expects comparable sales to recover this year, up 17%, but below analysts’ predictions of up to 20%.
Ulta’s shares fell 11% in Friday’s trading session.