Dive Brief:
- Ulta on Thursday notched another quarter of growth, with net sales in Q3 increasing 6.4% to $2.5 billion, according to a company press release. Comps grew 4.5%, on top of 15% growth last year.
- The retailer’s comp performance was driven by 10% growth in its digital channels, CEO Dave Kimbell said on a call with analysts. Profits also grew, with net income increasing 10% to $249 million.
- Also on Thursday, Ulta announced that longtime Chief Financial Officer Scott Settersten will retire on April 1. Taking his place is Paula Oyibo, currently senior vice president of finance.
Dive Insight:
As Ulta continued its winning streak, the retailer bid farewell to its CFO, who is set to leave in the spring after more than a decade leading the beauty retailer’s finances and nearly 20 years with the company. During Settersten’s tenure, Ulta quadrupled its revenue and more than tripled its market capitalization.
On a call with analysts Thursday, Kimbell expressed “sincere gratitude” to Settersten for his work and called him an “exceptional partner” in leading the company.
“From his early days helping take Ulta Beauty public and throughout the last 10 years as CFO, Scott's impact on Ulta Beauty has been tremendous,” Kimbell said. “He's been a passionate steward of our business and the strong and constant shareholder returns achieved during his tenure are a testament to his leadership and disciplined approach to driving profitable growth.”
Ulta isn’t looking far for his replacement, elevating four-year veteran Oyibo to the position. Oyibo joined the company in 2019 as vice president of finance for merchandise, marketing and e-commerce.
The CFO switch comes as the beauty category continues its winning streak, even after a period of substantial growth in 2021 and 2022. Consumer spending has stayed strong, according to Kimbell, and newer areas of beauty like wellness are also helping drive growth.
“While we expect growth will continue to normalize to historic ranges, we remain confident the category will continue to grow, barring a macroeconomic event,” Kimbell said.
In addition to investing in wellness, expanding its Conscious Beauty assortment and adding more brands aimed at people of color, Ulta also sees opportunity in the luxury space. The company launched Luxury at Ulta Beauty in the first quarter and could expand the category into makeup and skincare, Kimbell noted.
Ulta is expanding a small format it’s been testing and ended the quarter with 510 Ulta Beauty at Target shop-in-shops. As the company invests in brick and mortar, it continues to battle shrink through the expansion of locked fragrance cases, associate training, and other staffing and operational improvements.
“Our efforts to address shrink appear to be stabilizing the impact, but the overall environment remains challenging,” Settersten said.
