Ulta Beauty plans store closures and faces competition challenges

Ulta Beauty's CEO has announced that the company is facing challenges in the competitive beauty market, particularly against rivals like Sephora. This week, they confirmed the closure of some stores and noted that their sales are not as strong as expected. The CEO, Kecia Steelman, shared these updates amid growing concerns about consumer spending and market competition. For this year, Ulta anticipates only a 1% increase in sales, which is lower than previously expected. The company's profits are also forecasted to decline. Steelman emphasized the need for significant investments to improve customer experience and compete better. While Ulta's net income was slightly lower at $393 million for the last quarter compared to $394 million a year before, sales dropped to $3.49 billion, a 2% decrease from the previous year. Steelman acknowledged that Ulta struggles with online shopping and in-store services, impacting customer experience. She admitted to past missteps and pledged to focus on restructuring in 2025. The competitive beauty market has intensified, with Ulta losing market share last year. Despite these challenges, Ulta plans to open 200 new stores by 2026, hoping to boost sales by 4% to 6%. The company had previously achieved $10 billion in revenue in 2022. Ulta also aims to increase its loyalty program to 50 million members by 2028, currently having over 44 million members. In addition to its products, Ulta offers various beauty resources online. The company is also upgrading its loyalty program to enhance customer experience, focusing on personalization. Members of this program earn points on their purchases, which can be used for future discounts or gifts.