Ulta Magnificence sees model tie-up as boosting make-up gross sales in post-Covid droop


Inside an Ulta retailer location in New York.

Scott Millin | CNBC

Ulta Magnificence is counting on new model partnerships to gasoline the discount in make-up gross sales.

Cosmetics accounted for 43% of Ulta’s whole gross sales in fiscal 2021, the biggest phase ever, however they fell from the year-ago interval. This could assist manufacturers like Olaplex, Fenty and Supergoop drive efficiency of their flagship phase, the corporate mentioned throughout its fourth-quarter earnings report.

Internet gross sales rose 40% yr over yr to $8.6 billion for the yr ended January 30, based on Refinitiv consensus estimates, and rose 24% yr over yr to $2.7 billion in the course of the fiscal fourth quarter, for each durations. Matches Wall Road’s expectations.

CEO Dave Kimbell mentioned gross sales have recovered from the 2020 droop, with the corporate’s make-up phase proving extra unstable and lagging behind different classes. He mentioned that the make-up enterprise felt extra volatility resulting from Covid associated modifications in purchases and rising costs for customers.

“As we take a look at the sweetness class, even with these adversity, we stay optimistic. The class is wholesome. It is rising. It is emotionally essential and linked to our customers,” Kimbell mentioned.

In August, the corporate opened its first mini-shop location by a partnership with Goal. Ulta has opened greater than 100 outlets inside Goal shops to this point, and expects so as to add 250 extra places this yr.

Executives mentioned the partnership has helped gasoline progress in Ulta’s loyalty program, Final Rewards, which added 4 million members in the course of the fiscal yr for a complete of 37 million.

In keeping with Barclays Capital analyst Adrienne Yeh, the corporate’s rising rewards base “lays the inspiration for the continued momentum for a 2022 reopening.”

“The mix of elevated model consciousness, Goal partnerships and new manufacturers corresponding to Olaplex, N1D Channel and Fenty is driving new buyer acquisitions,” Yeh mentioned in a analysis notice.

Ulta has launched a range initiative to assist magnificence manufacturers by and for customers who establish as black, indigenous and other people of shade. Fenty, based by pop star and entrepreneur Rihanna, is considered one of a number of black-owned manufacturers the retailer has launched in current months.

Kimbell mentioned on the corporate’s earnings name, “We’re not simply right here to get these manufacturers on the shelf. It is one factor to have these manufacturers on our cabinets — it is one other factor. And that is how we’re measuring success.” ”

“We’re doing this to drive engagement with our company and we’re seeing this for our manufacturers. So we’re optimistic about magnificence – about make-up, and BIPOC will likely be one of many parts that can drive us ahead.” Will enable you develop.”

Seeking to fiscal 2022, Ulta expects earnings per share of between $18.20 and $18.70 on income of between $9.05 billion and $9.15 billion. Analysts had forecast 2022 earnings per share of $17.84 and income of $9.14 billion, based on Refinitiv.

Ulta’s shares are round 3. fell, Because the earnings launch on Friday and has elevated almost 6% over the previous 12 months.

Correction: Ulta’s shares fell almost 3% on Friday. An earlier model misquoted the inventory transfer.



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