Inside an Ulta store location in New York.
Scott Mlyn | CNBC
Ulta Beauty is partnering with new brands to boost lagging makeup sales.
For all of 2021, cosmetics accounted for 43 percent of the retailer’s total sales, the largest market share to date but down slightly from fiscal 2020. fourth quarter earnings report that brands like Olaplex, Fenty and Supergoop will help drive performance in its flagship segment.
Net revenue grew 40% year-over-year to $8.6 billion and increased 24% year-on-year in the fourth quarter to $2.7 billion, matching Wall Street expectations for both periods, according to the consensus estimate of Refinitiv.
As sales have recovered from their 2020 slump, the company’s makeup business has proven volatile and lagged behind other categories, CEO Dave Kimbell said. Makeup faces bigger swings from Covid-related changes in shopping and soaring prices for consumers, he said.
Kimbell said: “When we look at the beauty sector, even with these difficulties we are optimistic. This category is healthy. It is growing. It is important emotionally and connect with our consumers,” Kimbell said.
In August, the company opened its first mini store locations through a partnership with Target. Ulta has opened more than 100 stores inside Target stores to date and hopes to adding another 250 locations this year.
Executives said the partnership boosted membership in Ulta’s loyalty program, Ultamate Rewards, which added 4 million members in 2021 for a total of 37 million.
According to analyst Adrienne Yih, analyst Adrienne Yih of Barclays Capital.
“The combination of increased brand awareness, the Target partnership, and new add-on brands, such as Olaplex, N1 de Chanel and Fenty, are accelerating the customer acquisition process,” said Yih. new products”.
Ulta also came up with a diversity initiative to support beauty brands for and for people who identify as Black, Indigenous, and people of color. Fenty, founded by singer and entrepreneur Rihanna, is one of several Black-owned brands the retailer has introduced to shelves in recent months.
“We’re not here just to get these brands on the shelves. It’s one thing to get on our shelves – it’s another thing to thrive. And that’s how we measure success.” , Kimbell said on the company’s earnings call. “We’re doing this to drive engagement with guests, and we see that for our brands. So we’re optimistic about beauty – about makeup, and BIPOC will be one of the key elements.” factors that help us drive future growth.”
Looking ahead to next year, Ulta expects full-year earnings per share of $18.20 to $18.70 on revenue between $9.05 billion and $9.15 billion. Analysts had forecast 2022 earnings per share of $17.84 and revenue of $9.14 billion, according to Refinitiv.
Shares of Ulta fell nearly 3% Friday after earnings and up about 6% over the past 12 months.
