Ulta issues weak guidance, citing consumer uncertainty, rising competition and company missteps

Ulta Beauty on Thursday issued weak guidance for the year ahead as it navigates a series of internal missteps, rising competition and what it called "consumer uncertainty."

The retailer, which appointed Kecia Steelman as its new CEO in January, said it's expecting comparable sales to be flat or grow 1% in 2025, while analysts had anticipated they would rise by 1.2%, according to StreetAccount. 

It's expecting full-year earnings to be between $22.50 and $22.90, lower than expectations of $23.47, according to LSEG. 

Ulta is the latest company to forecast a rocky year ahead. While it factored uncertain consumer spending into its guidance, the retailer is also navigating a series of company-specific challenges and views 2025 as a transition year. Fixing those issues will cost money, which is part of the reason why it's expecting profits to be lower than Wall Street anticipated in the year ahead.

"I've shared our plan to make important guest-facing investments, which are necessary to improve our competitiveness and re-accelerate long term share growth," said Steelman on a call with analysts. "These investments will pressure profitability in 2025 but we believe they are critical to driving long-term sustainable growth in a competitive, innovative category."

Shares rose 6% in extended trading.

Here's how the beauty retailer did in its fiscal fourth quarter compared with what Wall Street was anticipating, based on a survey of analysts by LSEG:

The company's reported net income for the three-month period that ended Feb. 1 was $393 million, or $8.46 per share, compared with $394 million, or $8.08 per share, a year earlier.

Sales dropped to $3.49 billion, down about 2% from $3.55 billion a year earlier. Like other retailers, Ulta benefited