Ulta Beauty announces first quarter fiscal 2023 results

With Ulta Beauty's rapid growth period temporarily coming to an end, its stock price fell 10% in after hours trading last Thursday. In the first quarter of the 2023 fiscal year, Ulta Beauty's net sales increased by 12.3% to $2.6 billion, compared to $2.3 billion in the same period last year. This is roughly in line with the analyst's forecast of $2.62 billion. Comparable sales, including store and e-commerce sales that have been open for at least 14 months, increased by 9.3%, compared to an 18% increase in the first quarter of the 2022 fiscal year.

Ulta Beauty's Chief Financial Officer, Scott Setterstein, stated in a conference call with analysts that "it is expected that the unprecedented growth of beauty products will slow down and promotional scenarios will increase after entering 2023." As in previous quarters, Ulta Beauty's sales in the popular category have increased faster than those in the high-end category, but Ulta Beauty emphasized that, it's still too early to judge this as a sign of a decline in trading in an uncertain economic environment.

Ulta Beauty CEO Dave Kimbell pointed out that Ulta Beauty is also facing pressure to reduce inventory, partly due to the frequent occurrence of organized retail crime, which is a social issue that other retailers are also facing right now.