Ulta Beauty adjusts sales forecast after slow first-quarter performance.

• On Thursday, Ulta Beauty disclosed its fiscal first-quarter earnings, which revealed the impact of the slowdown that its CEO had previously cautioned about.
• The growth rate of comparable sales, which includes Ulta stores open for at least 14 months and online sales, decreased by 1.6% year over year, significantly slower than the previous year.
• Retailers have emphasized beauty as a selling point amidst a decline in consumer spending due to rising costs.

On Thursday, the company reported its fiscal first-quarter earnings, which revealed the impact of the slowdown that its CEO had previously warned about.

Ulta's comparable sales growth, which includes sales from stores open for at least 14 months and online sales, decreased by 7.7% year over year, a significant decline from the previous year's 9.3% growth.

Ulta reported that it now expects net sales in the range of $11.5 billion to $11.6 billion and comparable sales in the range of 2% to 3%, down from its previous guidance of full-year net sales of $11.7 billion to $11.8 billion and comparable sales of 4% to 5%.

Ulta updated its full-year earnings per share forecast to a range of $25.20 to $26, which is lower than its previous projection of $26.20 to $27.

In April, Ulta CEO Dave Kimbell warned investors of cooling demand in the beauty category. Although the slowdown was expected, Kimbell stated that it affected the beauty company more significantly than anticipated, hitting it earlier and with greater impact.

Based on a survey of analysts by LSEG, the beauty company's performance during the period exceeded Wall Street's expectations.

• Earnings per share: $6.47 cents vs. $6.24 expected
• Revenue: $2.73 billion vs. $2.72 billion expected

In the quarter ended April 24, Ulta reported net income of $313.1 million, which amounts to $6.47 cents per share, in contrast to the $347.1 million, or $6.88 per share, recorded in the previous year.

Sales increased slightly to $2.73 billion, compared to $2.63 billion the previous year.

Retailers have been relying on beauty products to attract consumers despite rising costs, as evidenced by a recent billion-dollar fiscal year for a beauty brand that exceeded Wall Street expectations and caused shares to surge.

The AI-powered beauty company stated to CNBC that the industry is experiencing a shift rather than a slowdown.

The industry is undergoing transformation, causing consumers to shift online and opt for high-efficacy products that effectively address their issues, as stated by the company's CFO, Lindsay Drucker Mann, in a conversation with CNBC.

Recent price target reductions by analysts at Baird and Canaccord Genuity have caused the Wall Street view of Ulta to cool down ahead of the company's earnings report.

Despite reduced spending on discretionary items, consumers continue to prioritize beauty products, leading to significant growth in this category, according to analysts at Jane Hali & Associates. They view the wellness category as a key strength but are cautious on the makeup category.

The company's market value reached approximately $18.5 billion on Thursday, as its shares closed at $385.58 per share.