Ulta Beauty has blamed a mix of external and internal factors for flattening its sales growth in 2024. The US retailer’s sales inched up 0.8 per cent to $11.3 billion in the year ended 1 February 2025.
“For the first time, we lost market share in the beauty category in 2024. I am aware of the challenges that we face,” president and CEO Kecia Steelman said in a call with investors. “Some of them are external, while others we own. Our business is bigger and we’ve managed unprecedented category growth, and it is more complex as we’ve expanded our assortment and added new fulfillment choices like buy online, pick up in-store, ship from store and same-day delivery. These capabilities are driving guest engagement and enhanced accessibility, which have also resulted in execution challenges, particularly in product transitions and launches as we leverage new tools and processes. As a result, our in-store presentation and guest experience today are not as strong as we would like.”
Ulta is in the midst of a shake-up following a slower sales and store opening period. In January, Ulta named Steelman as chief executive, succeeding Dave Kimbell who retired after an 11-year tenure. In February, the company promoted Kelly Mahoney to CMO. The company has also expanded the roles of C-suite executives: Amiee Bayer-Thomas has moved from chief store operations officer to chief retail officer, with all store functions now centralised under her; Steelman added enterprise responsibilities to Mike Maresca’s role as chief technology and transformation officer; and brought together the e-commerce merchandising teams under Monica Arnaudo, who now serves as chief merchandising and digital officer.
Performance across the beauty sector was sluggish in 2024 due to myriad factors, including ongoing price sensitivity from consumers and challenges in China. Among the larger beauty players, Estée Lauder Companies reported a 2 per cent decline in sales to $15.6 billion in 2024, while L’Oréal’s sales rose 2.5 per cent to €11.1 billion.
In 2024, Ulta’s comparable store sales — meaning sales for stores open at least 14 months and e-commerce sales — increased 0.7 per cent (compared with a 5.7 rise in 2023). Gross profit as a percentage of sales dipped from 39.1 per cent to 38.8 per cent, impacted by slightly lower merchandise margins and higher supply chain costs, which were partially offset by better inventory management and a more favourable channel mix.
