THE WHAT?  Ulta Beauty has cut its full-year forecasts, expecting fiscal 2024 net sales to range between $11.5 billion and $11.6 billion, down from the previous forecast of $11.7 billion to $11.8 billion. The beauty retailer also lowered its diluted earnings per share estimate to $25.20 to $26, from an earlier projection of $26.20 to $27.

THE DETAILS  In the first quarter ended May 4, Ulta reported net sales of $2.7 billion, a 3.5% increase from $2.6 billion the previous year, but slightly below Wall Street’s forecast of $2.72 billion. Comparable sales grew by 1.6%, compared to nearly 10% growth in the same period last year. Net income was $313.1 million, or $6.47 per diluted share, surpassing forecasts of $6.25. CEO Dave Kimbell noted the prestige segment faced challenges due to increased distribution, timing shifts of product movements, and strong social media engagement in the prior year.

THE WHY?  CEO Dave Kimbell attributed the forecast adjustment to the dynamics experienced in the first quarter, including a slowdown in the beauty category and heightened competition. Kimbell highlighted increased competitive pressure from Sephora’s partnership with Kohl’s and Amazon’s expansion into premium beauty brands. Ulta plans to address these challenges by focusing on strengthening its assortment, accelerating social relevance, enhancing the digital experience, leveraging the loyalty program, and evolving promotional strategies. More details will be shared during Ulta’s investor day in October.