Since March 20, Ulta Beauty has been a digital-only business after having made the decision to close brick-and-mortar stores chainwide. The retailer provided a business update in advance of participation at the J.P. Morgan Retail Round-Up Virtual Conference.

“Although we do not expect to fully offset the revenue impact of our store closings, the multi-year, strategic investments we have made to enhance our omnichannel and supply chain capabilities, combined with the ongoing commitment of our distribution associates, have enabled us to support increased e-commerce demand and guest engagement,” Mary Dillon, Chief Executive Officer, said in a statement. “As we continue to support our essential e-commerce operations, we are taking actions in parallel to ensure that we maintain our financial strength and flexibility in the near term and position Ulta Beauty for long-term growth.”

The retailer has taken several actions in response to the Covid-19 pandemic to improve its financial flexibility, including drawing down $800.0 million under its $1.0 billion revolving credit facility on March 18, 2020. In addition, it has taken the following steps to preserve financial liquidity while its stores remain temporarily closed:

• Reducing expense plans, suspending new hires, and deferring merit increases for all corporate and store associates.
• Moderating the pace of investments to build international capabilities, but the company continues to expect to have an omnichannel presence in Canada in 2021.
• Aligning inventory receipts with current sales trends and prioritizing expense payment obligations to focus primarily on essential services.
• Reducing capital expenditure plans, particularly as it relates to new store openings; while the company plans to open new stores this year, it no longer expects to open a total of 75 new stores in fiscal 2020 and is working on an adjusted plan for new store openings, relocations, and remodel projects.
• Suspended its stock repurchase program.

Associates working in Ulta Beauty distribution centers are continuing operations to support the company’s essential e-commerce business.

• The company is providing associates actively working at the distribution centers a $2-per-hour wage premium.
• To continue to protect associates in its distribution centers, the company has elevated its already high levels of maximum sanitation and safety inclusive of social distancing and increased cleaning protocols in alignment with CDC guidelines.

“As we continue to vigilantly monitor this dynamic situation, we remain committed to protecting the health of our associates, guests, and operations. We are operating with continued consideration and optimism rooted in the strength of our business model, and we look forward to the time when we can safely bring our store and salon associates back together to invite guests into Ulta Beauty stores,” continued Dillon.