Ulta beats Street — again; Q2 sales jump 30%

8/25/2016

Ulta Beauty on Thursday posted another spectacular quarter amid surging sales. It was the ninth consecutive quarter that the beauty retailer topped expectations.



Ulta reported net income for the quarter, ended July 30, rose 21.3% to $90.0 million compared to $74.2 million in the year ago period.



Net sales increased 21.9% to $1.07 billion from $877.0 million in the year-ago quarter.



Same-store sales rose 14.4%, also more than expected, compared to an increase of 10.1% in the same period last year. The increase was driven by 9.7% growth in transactions and 4.7% growth in average ticket.



• E-commerce sales grew 54.9% to $55.9 million from $36.1 million in the same period last year.



“The Ulta Beauty team achieved another quarter of excellent top and bottom line performance, while making significant progress on many elements of our growth strategy,” said Mary Dillon, CEO, Ulta Beauty. “Our second quarter results reflect a strong pipeline of newness and innovation in merchandising, progress in growing our brand awareness, major milestones related to our loyalty program, continued rapid growth in our e-commerce business, and successful execution of our supply chain investments.”



• Ulta disappointed the Street, however, in its outlook. For the 2016 third quarter, it expects to report earnings between $1.25 and $1.30 per share on revenue between $1.07 billion and $1.09 billion. Analysts were looking for adjusted earnings of $1.29 per share on revenue of $1.08 billion.



• Ulta ended the quarter with 907 stores, representing an 11% increase in square footage compared to last year. The company is on track to open 100 net new stores and remodel 12 locations in 2016.



Analysts report that Ulta's appeal among consumers is being driven by several factors, including an increased interest in beauty products as part of an increased focus on health and wellness. Also, the prestige products featured in Ulta’s merchandise mix are proving to be popular, outpacing the mass or drug store brands by sales growth in 2015.
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