Ulta Stock Declines After CEO Notes Decrease in Beauty Product Demand

Beauty stocks took a hit on Wednesday as Ulta Beauty CEO Dave Kimbell warned of cooling demand for beauty products. Ulta Beauty shares plummeted around 13%, with other beauty industry players like E.L.F. Beauty, Estee Lauder, and Coty also experiencing declines. Kimbell indicated that the overall beauty category has seen a slowdown, contrary to the strong growth it has experienced in previous years.

This news comes as a surprise to many, as beauty has been a standout category in the retail industry, with consumers continuing to spend on makeup, skincare, and other beauty products despite cutting back on other discretionary purchases. Retail giants like Target, Kohl’s, and Macy’s have even been expanding their beauty offerings in response to the trend.

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However, economic pressures, rising credit card debt, geopolitical conflicts, and the upcoming presidential election are cited as factors that may cause beauty shoppers to tighten their wallets. Ulta Beauty had previously projected net sales to range from $11.7 billion to $11.8 billion for the 2024 fiscal year, with plans to increase comparable sales by 4% to 5%.

Despite the recent downturn, Ulta’s stock had reached a 52-week high in mid-March. As of Wednesday, shares were trading around $447, marking a decline of nearly 8% for the year. This performance lags behind the gains of the broader S&P 500 index.

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