Ulta reports glowing Q4 results, will expand to Mexico next year

On its latest earnings call, Ulta reported a rosy fourth quarter, thanks to a strong holiday performance and mass cosmetics success, and also shared news on its international expansion.

Net sales rose 10.2% to $3.6 billion in Q4, and comparable sales grew 2.5%. For the full year, net sales increased 9.8% to $11.2 billion, while comparable sales jumped 5.7%. Comparable sales in Q4 and the full year were impacted by lower dollar sales, however, as shoppers bought fewer products per transaction.

• CEO Dave Kimbell said the company secured mid-single-digit comparable growth during the holiday period.

The beauty retailer announced a joint venture with global brands operator Axo, and plans to expand Ulta to Mexico in 2025. Kimbell said the Mexican beauty market has “healthy awareness” of Ulta, and COO Kecia Steelman noted that its border stores have performed well. The retailer also plans to open 60 to 65 new US stores in 2024, including 10 small format stores.

Category close-up: Kimbell said the company continues to outpace the market in mass beauty, though its “market share of prestige beauty was more challenged” in the quarter, which he attributed to the expansion of prestige brands as “competitive intensity has increased.”

Skincare was Ulta’s fastest-growing category, showing double-digit growth thanks to brands like Byoma, Bubble, and Good Molecules. Dermatologist-backed brands like Cetaphil, La Roche Posay, and Dermalogica also performed well. Fragrance and bath also saw success, driven in part by the addition of Sol de Janeiro at 700 stores in January.

Makeup, however, saw a comparable sales dip, though a decline in prestige cosmetics was offset by a boost in mass cosmetics. Hair care comparable sales were down, as hair tools sales declined. Kimbell said “lip layering and blush proliferation” drove sales, and Elf, Nyx, and Juvia’s Place “delivered strong growth” as a result. He noted that brands with strong product innovation, marketing, and social media reach “will win, regardless of price points.”

After three years of significant growth, Kimbell predicted moderate to mid-single-digit growth in 2024, and Ulta anticipates net sales of $11.7 billion to $11.8 billion.