Ulta Beauty Incorporated’s stocks has dipped about $104 or 30% inasmuch as its Q2 earning results. Nonetheless, the beauty company has risen about 4% recently and closed at $233.85, which indicates that the downside can be capped.
Reportedly, Ulta’s problems begun with its Q2 results. Their earnings and sales was a bit short for analysts estimates, which investors found to be not very good. More so, the company management lowered their yearly sales and EPS guidance, which had investors irked.
Ulta CEO Mary Dillon and team stated the reason behind the dip yet reporting that there wasn’t a change in their positive long-term outlook.
For the cosmetic market, fast growth was observed during the past years. However, this year, the growth for this category has declined. The Ulta Beauty management has expected challenges in the industry in the cosmetic market to affect their sales in the next term.
“The Ulta Beauty team delivered another quarter of solid top line performance, gross margin expansion and double-digit earnings growth,” quipped Dillon as per The Motley Fool.
Apparently, growth is detected to shift from makeup to skincare. Ulta put some focus in skincare to offset the dip in the cosmetic category. Sadly, skincare only comprises a small portion in Ulta Beauty’s business.
Reportedly, Ulta Beauty’s stock went down about 4.5% year to date as of September 17. However, Estée Lauder’s stick increased to 47.1% at the same time frame, as per Market Realist.
Lastly, Ulta’s earnings per share will most likely be $11.86-$12.06 for the fiscal year 2019. The company is expecting their sales to increase 9%-12% for this year, which is quite low compared to its guidance of low double digit growth.