On March 13, U.S. beauty retail giant Ulta Beauty announced its financial results for fiscal year 2024, outlining plans to accelerate business reforms in response to slowing sales growth. The company reported full-year revenue of $11.2957 billion, a modest 0.8% increase year-over-year, while comparable store sales rose by only 0.7%.
Organizational Restructuring and New Growth Strategy
In response to the slowdown, Ulta Beauty has been reinforcing its management structure. In January 2024, Kecia Steelman was appointed as CEO, succeeding Dave Kimbell, who had led the company for 11 years. Further restructuring followed in February, with Kelly Mahoney promoted to Chief Marketing Officer (CMO). Additionally, Monica Arnaudo was appointed as Chief Merchandising and Digital Officer (CMDO), assuming responsibility for the e-commerce division and strengthening the company’s digital strategy.
Alongside these leadership changes, Ulta Beauty announced a new growth strategy for 2025 under the name “Ulta Beauty Unleashed.” This initiative focuses on four key areas: strengthening core business operations, expanding new business opportunities, enhancing e-commerce through the launch of a new marketplace, and advancing international expansion with plans to enter the Mexican market and broaden its presence in the Middle East.
A major focus of the strategy is the wellness sector, with the company planning to introduce a new product lineup catering to the growing demand for health-conscious beauty offerings. Additionally, Ulta Beauty will strengthen its advertising platform, Ulta Beauty Media, to provide enhanced marketing solutions for brands, aiming to diversify its revenue streams beyond traditional retail sales.
2025: A Year of Transition
The beauty industry faced significant challenges in 2024, with market conditions affecting major players differently. Estée Lauder Companies reported a 2% decline in sales, totaling $15.6 billion, while L’Oréal saw a 2.5% increase, reaching €11.1 billion.
Ulta Beauty’s gross profit margin declined to 38.8% from 39.1%, reflecting increased costs that have pressured profitability. Additionally, cosmetics sales accounted for 36% of total revenue, down from 41% the previous year, while skincare and fragrance sales demonstrated relative growth. In response to these shifts, the company is working to optimize its product lineup and refine its market strategy to better align with evolving consumer preferences.
Despite these challenges, Ulta Beauty has positioned 2025 as a “transitional year,” forecasting revenue between $11.5 billion and $11.6 billion. CEO Kecia Steelman remains optimistic about the company’s future, stating, ““I am incredibly optimistic about the future of Ulta Beauty, as I believe we have the right elements to drive our success – a strong business model, an ambitious long-term plan, and passionate associates who bring our brand to life for our guests every day. Fiscal 2025 will be a pivotal year as we make purposeful investments to fuel our future growth and move quickly to optimize our business.”
With a renewed leadership team and a comprehensive growth strategy, Ulta Beauty faces a crucial turning point. As it navigates an increasingly competitive landscape, the company’s ability to execute its reforms effectively will determine its path forward in the evolving beauty market.
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