Consumers’ interest in beauty and wellness products and services remained strong in the fourth quarter for Ulta Beauty.
The company completed a year of record sales, profitability and member growth during the quarter ended Jan. 28. Its annual revenue topped $10 billion for the first time, its annual net income surpassed $1 billion, and its Ultamate Rewards membership exceeded 40 million, the cosmetics and skincare retailer said in a Thursday (March 9) press release.
“As we move into fiscal 2023, we remain optimistic about the strength and resiliency of the beauty category and the opportunities for Ulta Beauty,” Ulta Beauty CEO Dave Kimbell said Thursday during the company’s quarterly earnings call. “Over the last two years, the U.S. beauty category experienced unprecedented growth, reflecting various factors such as product innovation, expanding regimens, new social media platforms, return to work and resumed social activities, and the elevated connection between beauty and overall self-care.”
Other retailers have seen strong demand for beauty and wellness products too.
For example, Target announced in February that it is expanding its center-aisle wellness offerings with more items such as vitamins and deodorants.
“Self-care is one of the areas where we are seeing the fastest growth,” Cassandra Jones, senior vice president of merchandising, essentials, beauty and health at Target, said at the time.
Similarly, e.l.f. Beauty said during a February earnings discussion that it recorded 49% net sales growth and completed its 16th consecutive quarter of net sales growth during the three months ended Dec. 31.
Looking ahead, in fiscal 2023, Ulta Beauty said it expects to earn net sales of $10.95 billion to $11.05 billion and a comparable sales increase of 4% to 5%, according to the press release. The retailer also plans to add 25 to 30 new stores and remodel or relocate another 20 to 30.
“Consumer engagement with beauty is stronger than ever and is more connected with wellness,” Kimbell said during the call. “These factors give us confidence that the growth of the U.S. beauty category will remain healthy but moderate to the higher end of the category’s historical annual growth rate of between 2% and 5%, barring a major economic event.”
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