Ulta Beauty Forecasts Strong Q4, Names New CEO
Cosmetics retailer Ulta Beauty has forecast a strong fourth quarter and announced that Kecia Steelman will replace retiring CEO Dave Kimbell. The company expects comparable sales to increase modestly, with its operating margin above the high end of its previously expected range of 11.6% to 12.4% of sales.
Kimbell, who has been with the company for 11 years and has been CEO for nearly four, will serve as an adviser until June 28. Steelman, currently president and operating chief, will join the board and take on the top role.
The transition comes as Ulta is facing a pullback in demand and rising competition in high-end skincare and makeup, caused by years of inflation and strained consumer budgets. The company had previously slashed its annual sales and profit forecasts twice before raising them in December, citing signs of a rebound in demand during the holiday shopping season.
Ulta expects to report fourth-quarter results on March 13. The company’s sales are expected to range between $11.1 billion and $11.2 billion, with profit expected to be between $23.20 and $23.75 per share.
Despite the company’s strong outlook, some analysts remain cautious. “While we think Steelman is the right person to replace Kimbell, we remain sidelined as beauty retail competition continues to intensify with new entrants,” said Jefferies analyst Ashley Helgans in a client note.
The shuffle at Ulta follows announcements from other major companies, including Nike, Starbucks, and CVS Health, which have seen top executives step down and new leaders take the helm in response to economic uncertainty.