Ulta Beauty has reported a downturn in sales during its fourth quarter 2024 trading update.
Net sales decreased by 1.9% to US$3.5bn in Q4, which was primarily due to the benefit of an extra week of sales during the same period in 2023.
The results were partially offset by new store contributions and increased comparable sales.
Despite a lacklustre final quarter, the US beauty retailer reported a 0.8% increase in sales to $11.3bn for the full year.
Gross profit increased to $4.39bn, up from $4.38bn last year, but as a percentage of net sales gross profit decreased to 38.8% compared with 39.1% in 2023.
This was primarily due to lower merchandise margin, deleverage of store fixed costs and higher supply chain costs.
Kecia Steelman, President and CEO, said 2025 will be a “pivotal year” for the business in order to stabilise its profitability.
“We [will] make purposeful investments to fuel our future growth and move quickly to optimise our business,” said Steelman.
“While it will take time to see the impact of these efforts, we are confident these investments will help reignite our momentum and unlock sustained growth and long-term value for our shareholders."
Steelman has succeeded outgoing CEO Dave Kimbell, who is retiring after 11 years with the US beauty retailer.
Kimbell will step down from the company’s board of directors, but will serve as an advisor until 28 June 2025.
“I am incredibly proud of our team’s collective impact on the business and the care they showed our guests throughout the holiday season, positioning us to finish fiscal 2024 ahead of our expectations,” added Steelman.
“I am incredibly optimistic about the future of Ulta Beauty, as I believe we have the right elements to drive our success – a strong business model, an ambitious long-term plan, and passionate associates who bring our brand to life for our guests every day.”
It follows Beyoncé’s hair care brand Cécred choosing Ulta Beauty to make its break into bricks-and-mortar.
The ‘Single Ladies’ singer’s textured hair-focused products will be available to shop in more than 1,400 Ulta stores from 6 April 2025.
This includes its Hydrating Shampoo and Conditioner, Fermented Rice & Rose Protein Ritual and Restoring Hair & Edge Drops.
The move coincides with the brand’s first anniversary, following its launch into the hair care category in February 2024.