Ulta Beauty sales plummet 33%
May 29, 2020
American cosmetics retailer Ulta Beauty, Inc. announced a 32.7% decrease in first-quarter sales on Thursday, leading the company to topple into loss as disruptions related to the ongoing Covid-19 pandemic took their toll on its operations.
For the first quarter ended May 2, 2020, the Bolingbrook, Illinois-based retailer reported net sales of $1.17 billion, compared to $1.74 billion in the prior-year period. Comparable sales fell 35.3%, compared to a 7.0% rise in the first quarter of 2019.
Due to the coronavirus crisis, Ulta temporarily closed all of its stores on March 19. The retailer launched curbside pickup in select locations on April 23, but has only been reopening stores since May 11. Currently 333 of the company’s locations are open to customers, while 840 are offering curbside pickup.
Ulta’s quarterly net loss came to $78.5 million, or $1.39 per diluted share, compared to net income of $192.2 million, or $3.26 per diluted share, in the first quarter of fiscal 2019.
“The rapid escalation of Covid-19 resulted in significant disruption to our operations,” said Ulta Beauty CEO Mary Dillon in a release. “For much of the first quarter, Ulta Beauty operated as a digital-only business, and while e-commerce sales exceeded our expectations, it was not enough to fully offset the impact of our store closings.”
Due to the prolonged store closures, Ulta furloughed a number of its store and salon associates on April 19, and has also implemented a range of other cost-saving measures in order to preserve its operations during and after the coronavirus crisis.
The company has, for example, suspended new hires, deferred merit increases and reduced marketing, travel and other discretionary expenses. Ulta’s capital expenditure plan for the current fiscal year has also been scaled down, with the retailer now expecting capital expenditure to total between $200 million and $210 million in fiscal 2020.
Having opened 11 new stores over the course of the first quarter, Ulta now operates a total of 1,264 retail locations, but has reduced its opening and relocation plans due to the coronavirus. The company now expects to open between 30 and 40 new stores and complete approximately three relocation projects this year.
In light of the rapidly evolving situation surrounding the Covid-19 epidemic, Ulta has not provided financial guidance for the second quarter or the full fiscal year.
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