Ulta Beauty’s stock price dipped as much as 10 percent in after-market trading Thursday as its period of rapid sales growth began to moderate.

Net sales increased 12.3 percent to $2.6 billion in the primary quarter of fiscal 2023, in comparison with $2.3 billion in the identical period last yr and a touch below analysts’ predictions of $2.62 billion.

Comparable sales, which include stores open at the least 14 months and e-commerce sales, increased 9.3 percent in comparison with a rise of 18 percent in the primary quarter of fiscal 2022.

“We entered 2023 anticipating that the unprecedented growth in the wonder category would moderate and that the promotional environment would increase,” said chief financial officer Scott Settersten during a call with analysts. “These trends materialized in the primary quarter and are reflected in our results.”

As has happened in previous quarters, sales within the mass category at Ulta Beauty grew faster than prestige ones, however the retailer stressed that it was too early to inform if it is a sign of trade down in an uncertain economic environment.

“It’s difficult to know with certainty if the robust growth of mass products is on account of strong engagement with revolutionary mass brands, comparable to E.l.f. and La Roche Jose or on account of increased consumer price sensitivity,” added chief executive officer Dave Kimbell throughout the call.

A breakdown of the numbers showed that skincare was its best performing category once more with each prestige and mass delivering double-digit comp growth. Color cosmetics delivered high-single-digit growth for the quarter, while the fragrance and bath categories saw low double-digit percent growth, while the hair category was flat.

Its services business, meanwhile, delivered double-digit comp growth again this quarter, driven by growth in cut and magnificence, blowout and makeup services.

Its 2023 outlook for net sales is now $11 billion to $11.1 billion, compared with a previous forecast of $10.95 billion to $11.05 billion.

Net income increased 4.7 percent to $347.1 million, in comparison with $331.4 million a yr earlier. Diluted earnings per share increased 9.2 percent to $6.88, above Wall Street forecasts of $6.82.

“While we expect the operating environment to proceed evolving, we remain confident within the resilience of the wonder category and in our ability to drive share and profitable growth with our proven business model, a various, best-in-class assortment, an industry-leading loyalty program, and our world-class team,” Kimbell said.

Afterward throughout the earnings call, Kimbell noted that Ulta is continuous to see pressure from inventory shrink, partly on account of organized retail crime, a trend other retailers are experiencing.

“We now have updated our full-year guidance to reflect the persistence of this trend,” he said. “Our shrink is the result of assorted aspects. Theft, specifically organized retail crime or ORC is an increasingly concerning challenge, especially as we’ve seen an increase in violence and aggression during these incidents.”

Before the outcomes were released, Ulta’s shares closed up 0.8 percent to $485.12.