Ulta Beauty, a leading retail chain in the beauty industry, has recently announced that consumer spending is slowing down faster than anticipated.
CEO Dave Kimbell shared this news at an investor conference, explaining that the decline is being felt across all price points and product segments within the beauty category.
This comes as a surprise, given the strong growth experienced by Ulta and other beauty companies over the past three years.
Kimbell attributed the slower growth to various factors affecting consumers’ lives, without providing specific details.
Quite an eco warning from Ulta Beauty
Never a healthy sign when women start to save on beauty products.
“What we’ve seen so far is a slowdown in the total category across price points and segments,” chief executive Dave Kimbell.#Economy pic.twitter.com/zqVhBMrDjh
— Alexander Stahel 🇺🇦🇮🇱 (@BurggrabenH) April 3, 2024
Ulta also expects minimal growth in sales for the current quarter compared to the same period last year.
As a result of this announcement, Ulta’s shares dropped by about 15%, with other beauty companies like e.l.f. Beauty, Coty, and Estée Lauder also experiencing a decline in their stock prices.
Despite the expected slowdown, some analysts believe that consumers will continue to prioritize beauty products, especially in the skincare and wellness categories.
However, competition in the industry is heating up, with rivals like Sephora expanding their presence and other retailers increasing their involvement in the beauty business.
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To attract customers, Ulta is relying on new product launches, such as tennis star Serena Williams’s recently launched line, Wyn Beauty.
NEW: In the last 8 months, Ulta Beauty in Victor reports losing more than $100,000 in stolen goods.
Over the course of two days last week, the Monroe County Sheriff's Office says its retail theft detail team arrested more than 30 people and recovered more than $7,000 of stolen… pic.twitter.com/TzCQBT1M2e
— Jackie Napier (@TheJackieNapier) April 3, 2024
The National Retail Federation predicts a modest 2.5% to 3.5% increase in U.S. retail sales this year, slightly below the pre-pandemic average. While the economy is expected to remain relatively stable, growth in 2024 may be slower due to reduced job and wage gains.
Other consumer-goods companies, like PVH, which owns Calvin Klein and Tommy Hilfiger, are also bracing for a slowdown in consumer spending.
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They have adopted a cautious approach to planning in 2024, forecasting a decrease in overall revenue compared to 2023.
