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Ulta shares tumble on weaker-than-expected outlook, retailer taps Dave Kimbell as CEO

The company also announced that its CEO Mary Dillon will step down in June, and be replaced by its president, Dave Kimbell.

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Inside an Ulta store location in New York.

Scott Mlyn | CNBC

Ulta Beauty said Thursday that fourth-quarter sales and profit fell from the prior year, hurt by weaker sales of cosmetics during the pandemic.

Although the decline was smaller than expected, shares fell as the beauty retailer gave a disappointing outlook for the coming year. Ulta shares fell more than 8% after the bell.

The company also announced that its CEO Mary Dillon will step down in June, and be replaced by President Dave Kimbell.

Dillon will also transition to executive chair of the company’s board, where she plans to remain for a year.

Kecia Steelman, Ulta’s chief store operations officer, will be promoted to chief operating officer.

Here’s what the company reported for its fourth quarter, compared with what Wall Street analysts expected, using a survey from Refinitiv:

  • Earnings per share: $3.41, adjusted vs. $2.35 expected
  • Revenue: $2.2 billion vs. $2.08 billion expected

“The Ulta Beauty team delivered better-than-expected results for the fourth quarter. Strong, enterprise-wide execution of our plans, combined with improving trends in consumer demand, resulted in solid results across multiple metrics, including sales, transactions and profitability,” Dillon said in a press release.

Ulta reported fiscal fourth-quarter net income of $171.5 million, or $3.03 per share, compared with $222.7 million, or $3.89 per share, a year earlier.

Excluding items, Ulta earned $3.41 per share, topping the $2.35 per share expected by analysts surveyed by Refinitiv.

Net sales fell to $2.2 billion from $2.31 billion a year ago, beating expectations of $2.08 billion.

Sales at stores open at least 14 months fell 4.8% in the latest period, hurt by fewer transactions. The company said transactions declined 12.2%, however, the average purchase per ticket rose 8.3%.

For fiscal 2021, Ulta expects to earn between $8.85 and $9.30 per share on revenue of $7.2 billion to $7.3 billion. The earnings forecast includes the impact of about $850 million of stock buybacks.

Analysts had been expecting Ulta to earn $10.61 per share on revenue of $7.32 billion, according to Refinitiv.

Same-store sales are expected to be in the range of 15% to 17%, the company said.

Ulta plans to open 40 net new stores and remodel about 21 stores in the coming year.

Due to the pandemic stretching on and the slow vaccine rollout, Ulta executives do not expect a strong recovery this year.

“While we are encouraged by recent sales momentum, visibility into the timing of a demand recovery remains limited. We expect much of 2021 will continue to be negatively impacted by masking requirements and social distancing,” said Ulta’s Chief Financial Officer Scott Settersten in a conference call.

Although the beauty retailer noticed a decline in makeup sales due to more people staying home, the company remains optimistic in the category’s long-term prospects.

“We see a renewal coming in [and] how our guests will engage in makeup behaviors, fashions, the looks, the styles, will continue to evolve,” said Kimbell.

In November, Ulta announced plans to open up small cosmetic shops within hundreds of Target stores across the country in order to achieve higher sales and expand its reach.

The cosmetics retailer has been hurt by temporary store closures during the pandemic. After reopening stores in July, the company saw its demand return with a strong comeback in its mobile app and e-commerce website.

Read the full earnings release here.

Source: https://www.cnbc.com/2021/03/11/ulta-earnings-q4-2020.html

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Source: https://www.cnbc.com/us-top-news-and-analysis/

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Source: https://www.cnbc.com/earnings/

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Nike earnings and sales beat estimates as retailer books record revenue in North America

Nike on Thursday reported fiscal fourth-quarter earnings and sales that topped analysts’ estimates, fueled by record revenue in North America.

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A man walks in front of Nike products exhibit, on February 22, 2021 in New York City.

John Smith | Corbis News | Getty Images

Nike on Thursday reported fiscal fourth-quarter earnings and sales that topped analysts’ estimates, fueled by record revenue in its largest market, North America.

It also offered a better-than-expected sales outlook for the upcoming year, driven by optimism around its women’s category, apparel business and Jordan brand.

Nike continues to benefit from consumers seeking out comfortable clothing to wear for workouts but also around the house. Even as people return to schools, offices and other social settings, many are still searching for relaxed options such as sneakers and stretchy pants.

Nike also saw a boost to its wholesale business — something that was largely inactive a year earlier during the Covid pandemic, when shopping malls and department stores had to temporarily shut their doors and put orders for merchandise on pause. Some of Nike’s key wholesale partners include Dick’s Sporting Goods, Foot Locker and JD Sports.

Nike shares jumped more than 12% in after-hours trading.

Here’s how the company did during its fiscal fourth quarter, compared with what analysts were anticipating, using Refinitiv estimates:

  • Earnings per share: 93 cents vs. 51 cents expected
  • Revenue: $12.34 billion vs. $11.01 billion expected

Nike’s net income for the period ended May 31 rose to $1.5 billion, or 93 cents per share, compared with a loss of $790 million, or 51 cents per share, a year earlier. That topped analysts’ forecast of 51 cents per share, using Refinitiv data.

Total revenue rose to $12.34 billion from $6.31 billion a year earlier, topping estimates for $11.01 billion. Sales were aided by the company selling more goods at full price and relying less on markdowns.

In North America, Nike’s biggest market, sales more than doubled to a record $5.38 billion as the company surged from a year earlier when the Covid pandemic was hitting the retail industry the hardest. The region’s sales were up 29% on a two-year basis.

In Greater China, sales were up just 17% at $1.93 billion. Though China is typically one of the fastest-growing markets for Nike, consumers in China have threatened a boycott after some Western brands including Nike expressed concern about allegations of forced labor in Xinjiang.

Management said Thursday that Nike is seeing improvement in China sequentially month by month.

“Building on our 40-year history in Greater China, we continue to invest in serving consumers with the best products Nike has to offer in locally relevant ways,” CFO Matt Friend said during a post-earnings conference call.

Digital sales were up 41% compared with the prior year and rose 147% compared with the same period in 2019.

The company said its membership model is helping to fuel its e-commerce business. Online purchases from Nike members, who receive first access to exclusive products and other perks, hit a record $3 billion during the fourth quarter. Nike said it now has more than 300 million members globally.

“Fueled by our momentum, we continue to invest in innovation and our digital leadership to set the foundation for Nike’s long-term growth,” said Nike CEO John Donahoe.

In fiscal 2022, Nike is expecting revenue to grow a low double-digit percentage, surpassing $50 billion. Analysts were looking for annual revenue of $48.5 billion.

The company anticipates the first half of the year to grow faster than the second half, Friend said.

“It’s important to note as we normalize our post-pandemic business and continue to reshape the marketplace, we do not expect quarter-by-quarter growth to be linear,” he said.

Nike also anticipates supply chain delays and higher logistics costs will persist throughout much of fiscal 2022. The headaches have been plaguing much of the retail industry for months now. A shortage of containers and a dearth of truck drivers, among other factors, have stalled merchandise from getting from ports to warehouses to shoppers’ homes.

Nike shares are down more than 5% year to date. The company has a market cap of $211 billion.

Find the full earnings press release from Nike here.

Nike continues to benefit from consumers seeking out comfortable clothing to wear for workouts but also around the house. Even as people return to schools, offices and other social settings, many are still searching for relaxed options such as sneakers and stretchy pants.

Source: https://www.cnbc.com/2021/06/24/nike-nke-q4-2021-earnings.html

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