Ulta Beauty’s stock bought a black eye from Wall Street after the company stated its well-liked chief government is stepping down.
Shares of the make-up big fell greater than 10 p.c on Friday after the company stated Thursday that CEO Mary Dillon might be succeeded by the company’s president, David Kimbell. Dillon will transfer to the chief chairman function for one year.
“This changing of the guard occurred sooner than the Street’s expectation,” wrote Wells Fargo analyst, Ike Boruchow, in a analysis word, including that Dillon is “one of the most respected CEOs in our space.”
Under Dillon’s eight-year run on the helm, the Bolingbrook, Ill.-based company has thrived with the exception of final year, as demand for cosmetics waned throughout the pandemic. During her tenure, gross sales grew by 236 p.c to $7.4 billion in 2019 and the quantity of shops doubled to 1,264.
Revenues plunged to $6.2 billion final year as fewer ladies purchased coloration cosmetics whereas they stayed dwelling as a consequence of COVID-19 lockdowns. But the company pulled off a surprisingly robust vacation quarter, with comparable gross sales down simply 4.8 p.c in contrast with the greater than 12 p.c decline analysts had anticipated.
“We begin fiscal 2021 with a strong foundation in place and good operational momentum,” Dillon stated in a press release. “We are strategically investing in our business to drive further market share gains, and … we are beginning to execute a thoughtful succession plan that ensures we continue to benefit from strong, experienced leadership for the next chapter of growth.”
Kimbell joined Ulta in 2014 as chief advertising officer and was named president in 2019.