By Sabrina Escobar
Ulta Beauty CEO Dave Kimbell is stepping down, the company said Monday, as the cosmetics retailer looks to reignite sales momentum in the slumping beauty category.
Kecia Steelman, Ulta's president and chief operating officer, will succeed him effective immediately, the company said. The move was a result of Ulta's succession planning process, said Board Director Lorna Nagler.
"Ms. Steelman had been President and COO and it is therefore not surprising that she is assuming the CEO position," wrote Michael Baker, an analyst at D.A. Davidson, in a Monday note. "She has been with ULTA for 10 years. We see this as a relatively orderly transition."
Kimbell will stay on as an advisor through June 28.
Kimbell became Ulta's chief executive in 2021, and has served in other leadership roles at Ulta since 2014. Steelman has also been with the company since 2014, and was named COO in 2023.
Shares of Ulta were gaining 1.9% to $439.50 in after-hour trading. The stock had a rough go of it last year, down about 11% over the past 12 months.
Demand for beauty products slowed after booming during the pandemic, and competition for consumer dollars has only gotten more fierce, with companies like Amazon.com and Sephora taking market share in the prestige beauty category. (It didn't help that Warren Buffett's Berkshire Hathaway sold off its stake in Ulta just a quarter after first starting a position.)
That said, Baker believes the worst of the market share losses may be in the past.
The company also gave an update on its fourth-quarter results Monday, saying it had a stronger-than-expected performance during the holiday season. Ulta now expects comparable sales will increase modestly and operating margin will be above the high end of previous guidance for a range of 11.6% to 12.4% of sales.
The update supports Baker's thesis that competitive pressures have peaked.
"This will be the second quarter in a row that comps will be better than expected, supporting our view that, as the company has now fully cycled the rollout of the Sephora store-within-a-store initiative at Kohls, the share pressure that has hurt ULTA's comps will subside," he added.
Write to Sabrina Escobar at sabrina.escobar@barrons.com
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(END) Dow Jones Newswires
January 06, 2025 18:04 ET (23:04 GMT)
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