Beauty retailer suffers weak sales in holiday period

By Katie Bird

- Last updated on GMT

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After a disappointing holiday period, cosmetics and beauty retailer Ulta has reduced its annual guidance figures.

Comparable store sales (discounting new store sales) for the 7 week holiday period starting the week before Thanksgiving and including the week after Christmas decreased 5.8 per cent from the same period last year.

Reduced guidance figures

As a result, the company has revised its fourth quarter predictions from the $354m to $368m range to the $339m to $343m range.

Ulta expects the weaker fourth quarter to drag the annual figures down and the company now predicts year sales to be between 1.083bn and 1.086bn, compared to the previous guidance range of $1.1bn - 1.11bn.

It was the run up to Christmas that negatively impacted the results according to the CEO Lyn Kirby.

“We experienced a significant drop in customer traffic in the 10 key selling days leading up to Christmas,”​ said Kirby.

The CEO puts this down to unparalleled discounts in the clothing category that tempted consumers away from the beauty store for their Christmas gifts.

In addition, she argues that particularly bad weather conditions in the pre Christmas period also kept people away from the stores.

In contrast, the post Christmas period has been more positive and sales have rebounded, according to the company.

Time to win market share

Despite the weaker sales in the holiday period, which is often crucial to beauty retailers, the company is not overly concerned by the current economic gloom.

“We believe that this economic environment represents a time to win market share,” explained Kirby.

“We have the financial flexibility to invest in market share strategies and square footage expansion and now is the time to utilize this strength to position use for greater growth as the economy stabilizes,”​ she added.

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