Ulta Beauty, Inc. ULTA shares are trading lower after the company provided long-term business strategy plans and reaffirmed its fiscal year 2024 guidance.
Ulta Beauty aims for profitable growth through four focus areas – assortment, experience, access, and loyalty, targeting 1,800+ new stores (200 net new stores over the next three years) and a loyalty program of 50 million members by 2028.
The company continues to expect FY24 net sales of $11.0 billion to $11.2 billion (estimate: $11.16 billion), comparable sales to be down 2% to flat and operating margin of 12.7% to 13%.
While announcing its second-quarter results, the company reduced its FY24 net sales guidance from $11.5 billion – $11.6 billion to $11.0 billion – $11.2 billion and EPS guidance from $25.20 – $26.00 to $22.60 – $23.50.
“This plan will enable us to drive strong growth and capture greater market share in beauty and wellness,” said Dave Kimbell, chief executive officer.
On October 15, 2024, the company’s board of directors approved a new share repurchase authorization of $3.0 billion, which replaces the prior authorization implemented in March 2024.
As of August 3, the company had $1.6 billion remaining available under the prior $2.0 billion share repurchase program.
Ulta Beauty’s long-term targets for 2026 and beyond include 4% – 6% net sales growth, mid-single-digit operating profit growth, and low double-digit EPS growth.
The company said its disciplined capital allocation priorities will focus on funding operations, reinvesting in the business to drive growth, maintaining capital expenditures at 4%—5% of net sales, and returning excess cash to shareholders through buybacks.
Paula Oyibo, chief financial officer, said, “While we expect 2024 and 2025 will be transitional years as we manage through near-term category dynamics, over the long-term, we see additional opportunity to expand our leadership position, delivering both profitable growth and compelling shareholder value.”
According to Benzinga Pro, ULTA stock has lost 6% in the past year. Investors can gain exposure to the stock via Neuberger Berman ETF Trust Neuberger Berman Next Generation Connected Consumer ETF NBCC and Advisor Managed Portfolios Trenchless Fund ETF RVER.
Price Action: ULTA shares are trading lower by 3.6% to $356.20 at last check Wednesday.
Photo: Michael Gordon/Shutterstock
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