.August 30, 2024 10:12 AM

Ulta Beauty (NASDAQ:ULTA) reported disappointing second-quarter earnings, missing analyst expectations and cutting its full-year outlook, causing a 7% drop in its stock pre-market. Adjusted earnings per share were $5.30, below the $5.51 estimate, with revenue increasing by 0.9% to $2.55 billion, missing the $2.62 billion expectation.

In response, Ulta Beauty lowered its fiscal 2024 guidance, now expecting earnings per share of $22.60 to $23.50, down from the previous consensus of $25.26. Full-year revenue forecast was also reduced to $11 to $11.2 billion from the projected $11.495 billion.

CEO Dave Kimbell expressed disappointment, citing a decline in comparable store sales as the main reason for underperformance. The company’s gross profit margin fell to 38.3% from 39.3% due to lower merchandise margins and fixed store costs deleverage.