Ulta Beauty announced on Thursday strong first-quarter revenue, thanks to increased comparable sales and the opening of new stores, but dropped its outlook for fiscal 2024.

The Bolingbrook, Illinois-based company said net sales for the quarter ended May 4, increased 3.5% to $2.7 billion compared to $2.6 billion. 

As a result, comparable sales increased 1.6% compared to the first quarter of fiscal 2023, driven by a 1.3% increase in transactions and a 0.3% increase in average ticket.

Still, net income dropped to $313.1 million, compared to $347.1 million, while diluted earnings per share equally fell to $6.47, compared to $6.88. 

During the quarter, Ulta opened 12 new stores, closed two stores, and relocated one store, ending the quarter with 1,395 stores totaling 14.6 million square feet.

“The Ulta Beauty team delivered net sales growth of 3.5% and comparable sales growth of 1.6% in a dynamic operating environment. I am proud of how our teams continued to execute our transformational agenda, adapt to a rapidly evolving marketplace, and thoughtfully manage expenses across the enterprise,” said Dave Kimbell, chief executive officer. 

“We have a clear plan to accelerate our momentum and continue delivering a best-in-class assortment and engaging experiences for our guests. I remain confident in our differentiated model, the resilience of the beauty category, and our ability to execute against our plans, but we have adjusted our annual guidance as we anticipate the dynamics we faced in the first quarter to continue for the balance of the year.”

The quarterly sales growth was not enough to support its previously reported 2024 outlook, however. Looking ahead, the company now expects annual sales of $11.5 billion to $11.6 billion, compared to $11.7 billion to $11.8 billion. Likewise, the comparable sales increase is now expected to be 2% to 3%, as opposed to 4% to 5%.