THE WHAT? Ulta Beauty has announced its results for the second quarter and first half of fiscal 2020. The US retailer saw its profit halved compared to the same six months of 2019 and US$1 billion shaved off its net sales total.
THE DETAILS Net sales dropped 26.7 percent to US$1.2 billion in the second quarter, despite a steep 200 percent rise in e-commerce sales, due to the impact of COVID-19.
Gross profit was down to US$329 million and net income impacted by some US$33.5 million thanks to store closure and impairment costs in the 13 weeks to August 1, 2020.
However, the beauty chain did report that, as of July 20, the dfull fleet of stores were operational and salon services were available in approximately 88 percent of stores from August 1. However, stores are operating at reduced capacity and operating hours to accommodate social distancing.
THE WHY? There’s no prizes for guessing why sales and profit were down for the first six months of the year. As CEO Mary Dillon nots, “We are encouraged by the recent improvement in sales trends, but we believe it will take time to fully return to pre-COVID levels. Given continued disruption from the pandemic, new operational protocols, and near-term employment and economic uncertainty, we expect sales will continue to be challenged for the rest of the year,” continued Dillon. “Longer-term, we are confident that Beauty will recover and thrive, given continued strong engagement and emotional connection with the category.”