“The beauty landscape has fundamentally changed,” said newly-appointed Ulta Beauty CEO and president Kecia Steelman during Thursday’s earnings call. “Guest expectations continue to rise, and the pace of change is accelerating; the competitive environment in beauty has never been more intense.”
Ulta Beauty reported its Q4 2024 results on Thursday which include a net sales decrease of 1.9% to reach $3.5 billion compared to $3.6 billion during the same time last year. However, when looking at its full fiscal 2024 compared to 2023, net sales increased 0.8% to $11.3 billion compared to $11.2 billion.
“For the first time, we lost market share in the beauty category in 2024,” Steelman said. “I am aware of the challenges that we face — some of them are external, while others we own.”
CEO Steelman noted a few areas that contributed to the slowdown, including more competition in beauty retail, inclement weather, L.A. forest fires, and “heightened economic and geopolitical volatility.”
Others are more unseen: “We’ve managed unprecedented category growth, and it is more complex as we’ve expanded our assortment and added new fulfillment choices like ‘buy-online and pick-up in-store,’ ‘ship from store,’ and ‘same-day delivery,’” she said. “These capabilities are driving guest engagement and enhanced accessibility but have also resulted in execution challenges, particularly in product transitions and launches, as we leverage new tools and processes.”
The slowdown has also surprised industry analysts. According to a report released on March 6 by location analytics firm Placer.ai, Ulta Beauty foot traffic spiked in January 2023 and has experienced a slow decline since, although much of this could be tied to an increase in digital shoppers.
According to the firm, Ulta’s visits grew 2.5% year-over-year in Q4 2024 and 1.9% in 2024 overall.
But Elizabeth Lafontaine, director of research at Placer.ai, told Glossy it’s more than a post-holiday slowdown. “Other retailers in the beauty space [like Blue Mercury, Sally Beauty and Bath & Body Works] increased traffic in January 2025, so the slowdown we witnessed in Ulta Beauty traffic is more of an anomaly,” said Lafontaine. “The trends across the beauty category signal more of a shift in consumer behavior over time instead of a direct reaction to the holiday season.”
To combat the slowdown, Ulta CEO Steelman unveiled a plan called “Ulta Beauty unleashed” on Thursday’s call: “First, drive core business growth. Second, scale new accretive businesses. And third, realign our foundation for the future,” Steelman said.
“I’ve made organizational changes to streamline decision-making and align our teams around guest entry goals, and I’ve leaned in where we have immediate opportunities to improve our execution, all through the lens of protecting and nurturing the culture that we believe makes us so special,” Steelman said.
Ulta Beauty underwent major executive changes at the top of the year. This included the exit of CEO Dave Kimbell and CMO Michelle Crossan-Matos, both in January.
Kimbell was replaced as CEO and president by Steelman, former COO and 10-year veteran of the organization. Meanwhile, Kelly Mahoney stepped into the CMO role after nine years in various marketing roles at the company.
“It’s clear to me that how we’ve operated must change to ensure that we capture the opportunities in front of us,” Steelman said.
During Thursday’s earnings call, CEO Steelman announced several more executive changes, including the promotion of Amiee Bayer-Thomas into the newly-created chief retail officer role. Bayer-Thomas previously held the role of chief store operations officer. She’s been with Ulta for more than eight years.
“Amiee will add real estate and store design to the existing scope, which includes leadership of our store team and the loss prevention organization to align our transformation efforts with our cost optimization initiatives,” said CEO Steelman.
Mike Maresca, who joined the company in 2023, has had his role expanded as chief technology and information officer: “[Mike] will add enterprise-wide responsibilities to his scope,” Steelman said.
Steelman has also restructured several departments in her first 60 days. “We’ve brought our digital and e-commerce teams together with our merchandising and planning teams under Monica Arnaudo, chief merchandising officer,” she said. Arnaudo announced her spring retirement in 2024. Her successor will be replaced soon, said Steelman.
Improving store presentation, inventory levels and assortment are also top goals. “We’ve identified specific gaps, and we’re working quickly to address them,” Steelman said. “We are focusing to ensure the guest is at the center of everything we do, and we intend to move faster, invest strategically and optimize our business to achieve our long term goals, to drive profitable growth and market share.”
Top brand performers for Ulta during Q4 included Tatcha, Sol de Janiero and Naturium, while men’s fragrance and unisex multi-brand fragrance sets were top category performers. Steelman noted that brands struggling in Ulta have two things in common: poor social media strategy within the brand or overexposure in competing retailers.
The team will continue to lean deeper into wellness in 2025, as well. “There’s this merging between beauty and wellness, and we’ll be able to share more in the coming months, but we’ve got the plan as a team, and we’re ready to start moving in the right direction to bring this to life,” Steelman said.
As previously reported by Glossy, Ulta Beauty’s Q3 sales were led by men’s and unisex fragrance, which align with overarching market trends during the early holiday shopping period and through early 2024.
Ulta Beauty is the largest brick-and-mortar beauty retailer in the U.S., with more than 1,437 retail stores across 50 states. During 2024, the company opened 60 net new stores, relocated two stores and remodeled 41 stores. The company plans to remodel an additional 40-45 stores this year.
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