Ulta’s shares plummet with a weaker than expected outlook, retailer chooses Dave Kimbell as CEO

Ulta Beauty said on Thursday that sales and profit for the fourth quarter fell from the previous year, hampered by weaker cosmetics sales during the pandemic.

Although the drop was less than expected, stocks fell, as the beauty retailer gave a disappointing outlook for next year. Ulta’s shares fell more than 8% after the bell.

The company also announced that its CEO Mary Dillon will step down in June and be replaced by President Dave Kimbell.

Dillon will also transition to executive chairman of the company.

Kecia Steelman, director of store operations at Ulta, will be promoted to director of operations.

Here’s what the company reported in the fourth quarter, compared to what Wall Street analysts had expected, using a Refinitiv survey:

• Earnings per share: $ 3.41, adjusted vs. $ 2.35 expected
• Revenue: $ 2.2 billion versus expected $ 2.08 billion

Ulta reported a fourth-quarter fiscal net profit of $ 171.5 million, or $ 3.03 per share, compared to $ 222.7 million, or $ 3.89 per share, a year earlier.

Excluding items, Ulta earned $ 3.41 per share, exceeding the $ 2.35 per share expected by analysts polled by Refinitiv.

Liquid sales fell to $ 2.2 billion from $ 2.31 billion a year ago, exceeding expectations of $ 2.08 billion.

Sales at stores opened at least 14 months fell 4.8% in the most recent period, hampered by fewer transactions. The company said that transactions fell 12.2%, however, the average purchase per ticket increased 8.3%.

For fiscal year 2021, Ulta expects to earn between $ 8.85 and $ 9.30 per share on revenue of $ 7.2 billion to $ 7.3 billion. The profit forecast includes the impact of approximately $ 850 million in share repurchases.

Analysts had expected Ulta to earn $ 10.61 per share and revenue of $ 7.32 billion, according to Refinitiv.

Same store sales are expected to be in the range of 15% to 17%, the company said.

Ulta plans to open 40 new net stores and renovate about 21 stores next year.

In November, Ulta announced plans to open small cosmetics stores in hundreds of Target stores across the country, in order to increase sales and expand its reach.

The cosmetics retailer was hampered by the temporary closure of stores during the pandemic. After reopening stores in July, the company saw its demand return with a strong return on its mobile application and e-commerce website.

Read the full earnings release here.