Vantage Growth Forecast Market Hit: CE Transact Data Explores Ulta’s Earnings Miss
In its recent earnings call, Ulta Beauty commented that the tough consumer and competitive landscape led to its earnings miss. In this report, we leverage CE transaction and demographic data to explore how income affects spending at Ulta and how the company is faring against its competitors.
ULTA’s Sales Growth YoY
CE’s US Transaction data was predictive of Ulta Beauty Inc’s (ULTA) sales, as the retailer reported total sales growth of +0.9%, in-line with CE’s new Vantage Growth Forecast of +0.9% and below consensus estimates of +3.4%. As a result of the miss, the stock was down -7% post-earnings.
Ulta Adapts to Consumer Shifts and Pressures Amid Beauty Slowdown
Ulta Beauty attributes lower sales to consumer behavior shifts, as shoppers prioritize value and spend more cautiously. CE transaction data shows a broader pullback across all income brackets this quarter, compared to moderate losses in prior periods.
Ulta Navigates a Competitive Beauty Market Amid Slowing Demand
Ulta Management reflected on the tough competitive landscape in the Beauty industry as many new players are constantly entering the market and demand for beauty slows amid a tough consumer climate. CE data shows that while many new brands have launched in recent years, ULTA has maintained its overall Beauty Industry market share of about 20%, even as SEPHORA and many other competitors continue to grow their share as well. It seems that while the broader industry has slowed as a whole (-3% yoy), Ulta is still engaging its customers and growing its brand amid the slowdown.
Leading Brands and Categories in Q2
Ulta mentioned that top selling categories included skincare, haircare, and fragrance. This is consistent with what CE data sees across the broader Direct-to-Consumer Beauty industry. Skincare and haircare brands like Agency, rhode skin, DRMTLGY, and SpoiledChild were all among the brands with the largest growth in 2024’s second calendar quarter along with fragrance brands like Scentbird.
For key takeaways for the broader beauty industry, find CE’s Global Beauty Digest here.
Consumer Edge is the leading provider of alternative data for consumer spending and the sole source of global revenue signals. To gain insights into beauty, market intelligence, and trends, request a demo of CE products.
About the Authors
Rachel Zucker is an Insights Analyst for the CEIC. Follow her on LinkedIn.
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