Ulta Beauty Inc. (ULTA) fell short of expectations in its second-quarter earnings report, released after the market closed on Thursday. The company’s earnings per share came in at $5.30, missing the analyst consensus estimate of $5.55 by 4.5%. Revenue for the quarter also missed estimates, reaching $2.552 billion compared to the expected $2.61 billion. This represents a 2.52% shortfall. The decline in performance was attributed to a 1.2% drop in comparable sales, driven by a decrease in transactions and a slight increase in average ticket size. Ulta’s inventory levels rose by 10.1% to $2 billion, primarily due to preparations for new brand launches, the opening of a new fulfillment center in South Carolina, and the addition of 49 new stores. Despite some positive signs, Ulta’s CEO, Dave Kimbell, acknowledged that the company’s performance did not meet expectations. He attributed the decline to factors impacting store performance and outlined plans to address these trends. Kimbell expressed confidence in Ulta’s long-term strategy, emphasizing its differentiated model, strong financial foundation, and commitment to shareholder value. In light of the current trends, Ulta lowered its full-year guidance. The company now anticipates net sales between $11 billion and $11.2 billion, down from the previous estimate of $11.5 billion to $11.6 billion. Earnings guidance was also reduced from $25.20 to $26.00 per share to $22.60 to $23.50 per share. Shares of Ulta Beauty fell by 6.96% in after-hours trading, closing at $342 per share following the release of the earnings report.
