Ulta Beauty has a lot riding on the Kardashians during the holiday season (ULTA)


Ulta Beauty partnered with two members of the Kardashian family, Kylie Jenner and Kim Kardashian, to sell their cosmetic lines.
Kylie and Kim, who each have 120 million Instagram followers, have generated a lot of excitement about their products by announcing the launches on social media and appearing at Ulta Beauty stores.
Ulta earnings-per-share forecast for the crucial holiday quarter missed Wall Street expectations, sending shares down as much as 9.3% early Friday.
Watch Ulta Beauty trade live.

Ulta Beauty is counting on the Kardashians to boost its holiday sales.

“We’re excited to be participating in the rapid rise of influencer and celebrity-driven brands,” said CEO Mary Dillon during an earnings call after Thursday’s closing bell.

On November 17, the beauty chain kicked off a partnership with the reality star Kylie Jenner to sell her cosmetic brand Kylie Cosmetics in Ulta Beauty channels. And on November 25, Kim Kardashian, Jenner’s half-sister, launched four Kim Kardashian West fragrances in Ulta Beauty stores across the country.

“I’m so excited to let you guys know that @KylieCosmetics will be coming to all @ultabeauty stores around the country this holiday!” the 21-year-old entrepreneur tweeted in August to her 25 million followers, adding that there was “more to come…”

“@kkwfragrance is coming to @ultabeauty this holiday season!” Kardashian posted on her Instagram in November. “My fragrances launch in all stores across the country on Sunday 11/25! #KKWFragranceUltaBeauty.”

Kylie and Kim, who each have 120 million Instagram followers, have generated a lot of excitement about the launch when they announced the news on social media and appeared at Ulta Beauty stores.

“Our existing guests have responded very favorably to it,” CMO David Kimbell told investors on Thursday. “It also has done a nice job driving in some new guests, in particular younger and diverse consumers. So we’re really pleased with the effort overall.”

The ever-present cycle of Kardashian and Jenner content and their wildly popular cosmetics lines have propelled the half sisters to eye-popping net worths. Kylie has an estimated net worth of $900 million and Kim’s is about $350 million.

Wall Street has been waiting to see how the partnerships can drive traffic into Ulta stores and has lofty expectations for the holiday season, with analysts surveyed by Bloomberg expecting adjusted earnings of $3.59 a share — up more than 29% versus a year ago. However, the company said Thursday it only expects to earn between $3.50 and 3.55 a share, sending its stock down as much as 9.3% early Friday to $265.59 a share.

And Rupesh Parikh, an analyst at Oppenheimer, said he would take advantage of the pullback and keep Ulta Beauty as his top pick.

“Kylie Cosmetics is off to a strong start, and the company saw a modest improvement in the prestige cosmetics category, which bodes well for Q4 and beyond,” Parikh said in a note out on Thursday.

“However, Gross Margins were below …read more

Source:: Business Insider


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