US-based beauty retailer Ulta Beauty’s sales fell 29.6% to $2.4bn in the first six months of fiscal 2020 (ended August 1, 2020) compared to the same period last year. Net loss was $70.5m during the period compared to net income of $353.5m in the first six months of fiscal 2019.
In the second quarter (the 13 weeks ending August 1, 2020), sales decreased 26.3% year-on-year to $1.2bn. Net income for the quarter was $8.1m compared to $161.3m in the second quarter of fiscal 2019. The company attributes the decline to the COVID-19 pandemic.
Ulta Beauty ceo Mary Dillon said: “While the pandemic continues to impact our business, we are encouraged by improving trends. Comparable sales trends improved significantly throughout the quarter, from decreasing 37% in early May, as we began reopening stores, to decreasing 10% in July, when most of our stores were re-opened. Notably, sales trends have continued to improve, with comparable sales down in the mid-single digit range for the first three weeks of August.”
As reported, Ulta Beauty temporarily closed all stores on March 19 due to the COVID-19 pandemic. On May 11, the retailer started a phased re-opening process and, by the end of June, some 90% of stores were open. By July 20, the full fleet of stores were operational. As of August 1 salon services and brow services were available in 88% and 85% of stores, respectively. The company has also re-instated 17,000 furloughed employees.
Dillon said that while Ulta is encouraged by the recent improvement in sales, the company expects sales to continue to be challenged for the rest of the year due to impact from the pandemic, new operational protocols and employment and economic uncertainty.
The company withdrew its guidance for fiscal 2020 on March 17 and is not currently providing an earnings outlook.
However, as reported, while plans for fiscal 2021 have not been finalized, the company expects to open at least 30 new stores in fiscal 2021. Ulta will continue to evaluate these plans based on demand and location economics. The retailer said in July that it would close 19 stores. The closures are set to take place during the third quarter of fiscal 2020.