Ulta Beauty (NASDAQ:) stock fell more than 13% on Wednesday after the company attended the JPMorgan Retail conference.
The company noted that external data points reflect an economic slowdown at the beginning of the year.
“What we're seeing now, two months into the fiscal year, is a slowdown across categories,” said David Kimbell, CEO of Ulta Beauty. “The category has grown. We talked about this on a conference call a few weeks ago going into this year and were hopeful that the category would moderate.”
“So far, we are seeing a category-wide slowdown across price points and segments,” he added. “This was a little faster and a little bigger than we thought it would be. We're still growing, there's a lot of engagement, and everything I've been through, but this growth rate is probably our We found that it was declining faster than we expected.”
The company's CEO noted that “all external data points reflect an economic slowdown” across the price range, which he expects to moderate this year.
Mr. Kimbell acknowledged that the competitive environment is fierce, and said he has lost market share in some areas, particularly in prestige makeup, and sees challenges in the hair area.
However, he added that the company maintains its share across the total beauty category and is gaining market share in areas such as prestige skin and fragrances.
“There's real strength there,” Kimbell continued. “We're working on balancing that and finding growth.” Still, he said the slowdown the company is seeing “has broad implications across categories and price reductions.”
