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Ulta Beauty tanks as CEO warns of sluggish first-quarter demand, drags peers

In Business
April 03, 2024

(Reuters) – Shares of Ulta Beauty tumbled as much as 14% on Wednesday after executives flagged a slowdown in demand across categories in the first quarter, dragging down peers elf Beauty, Coty and Estee Lauder.

Ulta now anticipates its total category to increase at a modest mid-single-digit range after years of strong growth.

“What we’ve seen so far is a slowdown in the total category across price points and segments. That’s a bit earlier and a bit bigger than we thought,” CEO David Kimbell told J.P. Morgan analysts during a fireside chat.

Shares of the company were headed for their worst day since May 26, 2023.

Elf Beauty shares fell more than 8%, while those of Coty and Estee Lauder were down about 4%.

The latest warning comes after Ulta last month forecast annual profit below Wall Street estimates as supply chain costs and increased promotions squeezed its margins.

The company reiterated on Wednesday its comparable sales target of 4% to 5% growth for the year.

(Reporting by Savyata Mishra in Bengaluru; Editing by Sriraj Kalluvila)

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