- Ulta Beauty shares tumbled as it warned about slowing growth.
- The company cut its outlook for full-year operating margin.
- Its stock was the worst performer on the S&P 500 on Friday as shares fell 13.4%.
Ulta Beauty (ULTA) was the worst-performing stock in the S&P 500 on Friday as shares fell 13.4% after the beauty products store chain cut its full-year operating margin guidance and warned that its recent boom in growth would moderate.
Ulta Beauty posted fiscal 2023 first quarter profit of $6.88 per share, with revenue up 12.3% to $2.63 billion. Both were slightly above forecasts. Same-store sales, which include online purchases, advanced 9.3%, just below estimates. The average ticket fell 1.5%.
CEO David Kimbell indicated that during the quarter, “store traffic remained healthy, member growth showed continued strength, we delivered growth across key categories, and we strengthened engagement with the Ulta Beauty brand.”
However, he explained that while the importance of overall skin care and wellness was expected to continue, “the high level of growth the company has seen in these last two years will moderate and ultimately go back to the high end of the historical average.”
Ulta Beauty now projects a slight increase in full-year sales from its previous guidance, but it sees operating margin of 14.5% to 14.8% compared to the earlier 14.7% to 15%.