Florida, Port Saint Lucie, The Landing at Tradition, open-air mall, Ulta, cosmetics store.
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Ulta Beauty said Tuesday it will ship same-day delivery in select markets and expedite pick-up orders as the company pursues consumers who are accustomed to buying lip gloss from the comfort of their homes.
At Virtual Investor Day, the specialty cosmetics retailer shared its financial outlook for the next three years. For fiscal 2022 to 2024, Ulta Beauty said it expects diluted earnings per share to grow in double digits and capital expenditure of 4% to 5% of sales, roughly between 1.1 billion and 1.4 billion. US dollars.
Ulta said its net sales are expected to outpace growth in the rest of the beauty and personal care industry, with a growth target of 5% to 7%, up from 2% to 4% for the rest of the industry. Meanwhile, sales in the same stores will grow from 3% to 5% annually. It is planned to open 50 stores annually.
Shares fell more than 10% on Tuesday due to a disappointing outlook. Investors had high hopes for an explosion in demand as buyers renewed their bags and planned to go back to light. Ulta shares are up 42% this year as of the end of Monday.
Ulta Beauty – and the beauty industry in general – have struggled to adapt to the pandemic. The global health crisis has disrupted a segment of retail that has traditionally used testers, perfume sprints, and beauty consultants’ advice to boost sales. Consumers declined to buy cosmetics because they wore masks, worked from home and mostly missed social events.
Ulta, for example, added a curb pickup truck to its stores in April 2020, shortly after the outbreak of the pandemic.
Sales on the Internet and in stores that have been open for at least 14 months fell 17.9% in the fiscal year ending January 30. In the past fiscal year, transactions also fell 24.5% as shoppers began to visit Ulta’s stores and its website less.
Pandemic habits persist
Ulta sales rose in the last quarter and surpassed pre-pandemic levels. The retailer’s sales in similar stores in the second quarter were up 56.3% year-on-year. Transactions rose 52.5% over the same period last year. In two years, like-for-like sales were up 13.1%.
In its forecast, Ulta Beauty expects sales of skin care products to remain strong, sales of cosmetics to rebound, and sales of hair care products to increase. He also pointed to growth opportunities such as launching a new ad business and reaching more black and Hispanic clients with an expanded range of textured hair products and more.
Ulta executives said some of the habits associated with the pandemic will remain intact. Consumers have opted for personal care products such as facials, deep conditioners and home fragrances. They have an increased interest in health-related beauty products. And they are more digital savvy.
COO Kesia Stillman said the line between personal shopping and online shopping has blurred. For example, she says a shopper can drop items into their virtual cart based on TikTok videos. After a few days, she can visit the store and look at the eye-catching display and reviews, which she reads on her smartphone while looking through the aisles.
CIO Prama Bhatt said these customers are the most valuable to the retailer because they shop more often and spend more. A shopper who purchases through both channels typically spends three times as much as a shopper who purchases online only and makes four times as many purchases per year.
This discovery inspired Ulta’s efforts. In the lead-up to the holidays, some markets will be shipping on the same day. Ulta declined to disclose fees and markets where the service will be available, saying more details will be available soon.
It also promises buyers that curb pickup orders will be ready in two hours or less after they click the buy button.
His competitor, Sephora, owned by LVMH, last week launched a same-day delivery option in most major cities and suburbs. There is a flat shipping fee of $ 6.95. Items must be ordered by 4:00 pm local time for delivery on the same day.
Ulta’s Bhatt said shoppers are increasingly expecting and responding well to fast service.
“We think this will be an important distinction as we move forward,” she said.