Shares in Ulta Beauty (NASDAQ:ULTA) took a tumble at the time of writing after a less-than-stellar earnings announcement on Thursday. Despite upping its projected net sales for the year from between $10.95B and $11.05B to a revised $11B-$11.1B, Ulta didn’t quite hit the mark with its Q1 top line. Analysts had set their sights on a loftier $11.09B revenue goal, causing disappointment even in the face of raised projections. Further dampening spirits, the beauty company tempered its full-year margin forecast.
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In the earnings call, Ulta pointed to broader challenges impacting the entire beauty retail sector, including macroeconomic pressures and an uptick in organized retail theft. CFO Scott Settersten identified “shrink,” retail jargon for loss due to theft or errors, as a surprising key player in the quarter’s results, overshadowing even the somewhat expected increase in promotional activities. Settersten stressed that shrink was the principal factor behind the amended operating margin outlook, predicting the continuation of these trends throughout the year.
A look at the past five trading days for ULTA stock highlights the level of impact this news had on it. Indeed, shares fell over 12% at the time of writing. As a result, investors are now down 12.1% during this timeframe.
