Dave Kimbell, chief executive officer of Ulta Beauty, stepped down on Monday, surprising many industry insiders.
Kecia Steelman, president and chief operating officer, will succeed him as president and CEO and will join the company’s board. Kimbell will serve as an adviser to the company through June 28.
Kimbell’s abrupt retirement was greeted positively by investors, who sent shares of Ulta up 3.9 percent to $448 in after-hours trading on Monday.
While industry sources have long pegged Steelman as a natural successor to Kimbell, the fact that the change was immediate raised many eyebrows.
One source said they were “shocked” by the timing, but “not about the news.”
When asked by WWD about C-suite succession planning during Ulta’s investor day in October, Kimbell appeared surprised by the question, responding: “We are trying to accomplish a big focus — delivering a great experience for our guests, but we are equally as focused on our associates including career pathways and expanding their experience.”
Already, Ulta has seen some C-suite change, revealing last year that chief merchandising officer Monica Arnaudo plans to retire in the spring of 2025.
The company has been facing headwinds of late with increased competition from the likes of Sephora and Amazon Beauty. Kimbell has said the retailer has never experienced such a fiercely competitive environment.
While there was a slight improvement in Ulta’s third quarter, when net sales increased 1.7 percent to $2.53 billion, Kimbell had cautioned that the company still faced challenges.
But in Monday’s announcement, the company increased its fourth-quarter outlook, citing stronger-than-expected performance during the holiday season. It now expects comparable sales will increase modestly and operating margin will be above the high end of the company’s previous expected range of 11.6 to 12.4 percent of sales for the fourth quarter.
Ulta will report financial results for the fourth quarter and fiscal 2024 on March 13.
Investors have been closely watching the company’s stock, which has fallen by 10.7 percent over the past year.
Warren Buffett’s Berkshire Hathaway took a stake in August, but in the third quarter dumped almost all of that stock.
Kimbell joined Ulta in 2014 as chief marketing officer and continually expanded his leadership responsibilities, being named chief merchandising and marketing officer in 2015 and ultimately assuming the role of president in 2019. In 2021, he was appointed CEO, taking the reins from Mary Dillon.
“On behalf of the board, we are grateful to Dave for his guidance, dedication, and integrity, and for the significant contributions he has made to Ulta Beauty,” said Lorna Nagler, chair of Ulta Beauty’s board. “Dave has demonstrated a deep commitment to unlocking the power of beauty for our guests and advancing Ulta Beauty’s market leadership. He has played a meaningful role in shaping Ulta Beauty into the company we are today, and we appreciate his continued service as an adviser during this transition.”
Of his retirement, Kimbell said: “Serving as CEO of Ulta Beauty has been the highlight of my career, and I am proud to have led and worked alongside so many associates who are passionate about delivering great experiences for our guests. Kecia is a strategic leader with a proven record of driving operational excellence and creating exceptional guest experiences while fostering a caring and inclusive culture. I have every confidence she will expand Ulta Beauty’s leadership in beauty and wellness.”
As for Steelman, she was named chief operating officer in 2021 when Kimbell was appointed CEO. Prior to that, she had been chief store operations officer since 2015. Previously, she was group vice president at Family Dollar Stores from 2011 to 2014.
Kecia Steelman
In her most recent role as chief operating officer and president, she had responsibility for corporate strategy, information technology, store and services operations, supply chain, Ulta Beauty at Target, enterprise-wide transformation and loss prevention.
This included Ulta’s first international expansion into Mexico this year in a joint venture with Axo, a global brands operator.
“Dave has been a supportive leader, mentor and friend, and I am honored to become the next CEO of Ulta Beauty,” said Steelman. “Ulta Beauty is more than a beauty retailer — we are a destination that helps bring to life all the beautiful possibilities that lie within every guest and associate who walks through our doors. I am confident the strategic priorities we shared last fall will enable us to capture greater market share in beauty and wellness and deliver long-term profitable growth, and I am excited to lead our outstanding teams as we unlock even greater advantages of our operating model, drive best-in-class execution, and position Ulta Beauty for our next chapter of growth as the beauty destination for a lifetime.”
Of the announcement, Carol Hamilton, group president, merger and acquisitions, business development and West Coast HQ at L’Oréal USA, said: “Kecia will be a fabulous leader because she has a keen understanding of both the store environment and brands.”
And Ashley Helgans, an analyst at Jefferies, said: “We are positive on the announcement that Kecia Steelman has been appointed CEO and encouraged by the stronger-than-expected holiday. Steelman is a familiar face in the beauty industry as she has been at Ulta for 10 years and has worked in the retail industry since the early ’90s. While we think Steelman is the right person to replace Kimbell, we remain sidelined as beauty retail competition continues to intensify with new entrants.”
Mark Astrachan, an analyst at Stifel Corp., added: “We view Ms. Steelman’s appointment as more evolution than revolution as she has worked at Ulta since 2014. That said, Ms. Steelman’s background is in operations (in charge of store operations from 2014-2021), while Mr. Kimball’s background was marketing (head of marketing from 2014-2019) prior to his appointment as CEO.”
Now, it’s up to Steelman to steer the company forward and win over Wall Street.
