Ulta Beauty’s (ULTA) stock is down 10% after the cosmetics retailer issued second-quarter financial results that missed Wall Street’s targets and lowered its full-year guidance.
The Illinois-based company reported earnings per share (EPS) of $5.30 U.S., which was below the $5.46 U.S. that had been expected on Wall Street.
Revenue in the quarter totaled $2.55 billion U.S., which also fell short of the $2.61 billion U.S. that was forecast among analysts. Sales were up 0.8% from a year earlier.
The results marked Ulta Beauty’s first earnings per share miss since May 2020 and first revenue miss since December 2020.
Management blamed the poor results on a decline in same-store sales during the most recent quarter, with comparable sales falling 1.2% compared with an 8% increase a year earlier.
An increase in sales promotions and pullback in consumer spending also negatively impacted Ulta Beauty’s Q2 financial results, said company executives during their earnings call with media and analysts.
Looking ahead, Ulta Beauty now forecasts full-year same-store sales growth in a range of flat to down 2%. That compares with previous guidance that called for 2% to 3% growth.
The company also expects full-year revenue of $11 billion U.S. to $11.20 billion U.S., down from previous guidance of $11.50 billion U.S. to $11.60 billion U.S.
The outlook for full-year earnings has been lowered to a range of $22.60 U.S. to $23.50 U.S. per share, down from a previous forecast of $25.20 U.S. to $26 U.S.
Earlier in August, Warren Buffet’s Berkshire Hathaway (BRK.A / BRK.B) holding company disclosed a $266 million U.S. investment in Ulta Beauty, causing the share price to rise temporarily.
However, before today (Aug. 30), the stock of Ulta Beauty had declined 25% so far this year to trade at $367.58 U.S. per share