Ulta Beauty (NASDAQ:ULTA) inventory slid greater than 10% after posting a disappointing earnings consequence on Thursday, with its hunch rippling throughout its peer group on Friday.
Ulta (ULTA) missed on the highest line for Q1 and trimmed its steering on margins for the total yr. While the corporate additionally up to date its web gross sales outlook for the yr, mountain climbing its forecast for web gross sales to between $11B and $11.1B from a previous information of $10.95B to $11.05B, the up to date information nonetheless steered disappointment towards the lofty analyst expectation of $11.09B in income.
During the earnings presentation, Ulta spoke to macro pressures in addition to retail theft points impacting not solely its shops, however the broader magnificence retail trade. Management famous that organized thefts are an “increasingly concerning challenge” for retailers within the area.
“When I think about the financial results in totality, really shrink was the thing that surprised us in the quarter, and that’s really the driver when we think about the operating margin adjustment for the year,” CFO Scott Settersten instructed analysts on Thursday night. “We knew the promotional environment was going to ramp up some and maybe it’s slightly richer than we were expecting, but that’s not the driver. The driver is shrink by far. And so that’s what put a pretty meaningful drag on our first quarter, and we’re expecting those trends to continue the rest of the year.”
Ulta Beauty (ULTA) slid 12.13% shortly after the market open with its slide spreading to Sally Beauty Holdings (SBH) -1.4% and Target -1.6%, which earlier flagged considerations on the retail theft difficulty concerning magnificence merchandise particularly. Skin care retailer Bath & Body Works (BBWI) additionally edged decrease on Friday.
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