The news: Ulta Beauty is gearing up for a challenging year as competition heats up and consumer confidence dims.

• The retailer expects comparable sales to be flat to up 1% this year, short of expectations for a 1.2% increase.
• Profits will also be under pressure, due mainly to investments related to the company’s turnaround efforts—including an upcoming marketplace launch, improvements to the in-store and ecommerce experiences, and expansion into new markets.

The headwinds: Ulta’s problems are both internal and external, new CEO Kecia Steelman admitted. Beauty spending has normalized after its pandemic-fueled boom, while more players are vying for a piece of a still-lucrative pie. At the same time, Ulta has struggled with “execution challenges” related to its evolution into an omnichannel retailer, due to the complexities of offering more fulfillment options and a fast-growing assortment.