Ulta Beauty sees brand partnerships boosting makeup sales after Covid slump

Inside an Ulta retailer location in New York.Scott Mlyn | CNBCUlta Beauty is banking on new brand partnerships to spice up lagging makeup sales.For the total 12 months 2021, cosmetics accounted for 43% of the retailer’s whole sales, the biggest phase share by far however a slight dip from fiscal 12 months 2020. The firm stated throughout its fourth-quarter earnings report that manufacturers like Olaplex, Fenty and Supergoop ought to assist push efficiency in its flagship phase.Net sales rose 40% 12 months over 12 months in 2021 to $8.6 billion, and rose 24% 12 months over 12 months in the course of the fourth quarter to $2.7 billion, matching Wall Street expectations for each intervals, based on Refinitiv consensus estimates.CEO Dave Kimbell stated as sales have recovered from a 2020 slump, the corporate’s makeup phase has confirmed extra risky and lagged behind different classes. Makeup faces higher fluctuations from Covid- associated modifications in procuring and rising costs for customers, he stated.”As we have a look at the wonder class, even with these headwinds, we stay optimistic. The class is wholesome. It is rising. It’s emotionally necessary and linked to our customers,” Kimbell stated.In August, the corporate opened its first mini store places through a partnership with Target. Ulta has opened greater than 100 retailers inside Target shops to this point, and hopes so as to add one other 250 places this 12 months.Executives stated the partnership has fueled membership of Ulta’s loyalty program, Ultamate Rewards, which added 4 million members in 2021 for a complete of 37 million.The firm’s rising rewards base lays a “basis for ongoing momentum as 2022 reopens,” based on Barclays Capital analyst Adrienne Yih.”The mixture of accelerating brand consciousness, the Target partnership, and new brand additions, comparable to Olaplex, N1 de Chanel and Fenty, are driving new buyer acquisition,” stated Yih in a analysis be aware.Ulta has additionally launched a range initiative to help magnificence manufacturers by and for individuals who establish as Black, indigenous and other people of coloration. Fenty, based by singer and entrepreneur Rihanna, is certainly one of a number of Black-owned manufacturers that the retailer has launched to cabinets in latest months.”We’re not right here simply to get these manufacturers on the shelf. It’s one factor to reach on our cabinets — it is one other factor to thrive. And that is how we’re measuring success,” Kimbell stated on the corporate’s earnings name. “We’re doing this to drive engagement with our visitors and we’re seeing it for our manufacturers. So we’re optimistic about magnificence – about makeup, and BIPOC shall be one of many parts that can assist us drive progress going ahead.”Looking forward to the upcoming 12 months, Ulta expects full-year earnings per share of between $18.20 and $18.70 on income of between $9.05 billion and $9.15 billion. Analysts had forecast 2022 earnings per share of $17.84 and income of $9.14 billion, based on Refinitiv.Shares of Ulta fell practically 3% Friday following the earnings launch and are up roughly 6% over the past 12 months.Correction: Shares of Ulta fell practically 3% Friday. An earlier model misstated the inventory transfer.

https://www.cnbc.com/2022/03/11/ulta-beauty-sees-brand-partnerships-boosting-makeup-sales-after-covid-slump.html