Ulta Beauty steps up store expansion, raises outlook

A sizzling Ulta Beauty wowed the Street on Thursday, announcing aggressive store expansion at a time when many brick-and-mortar retailers are cutting back. It also upped its outlook.



In conjunction with its annual analyst and investor conference in Chicago, the specialty beauty retailer unveiled an updated real estate analysis that, it said, validates “incremental new store potential in the United States.” Accordingly, the beauty retailer raised its outlook for U.S. store expansion to a range of 1,400 to 1,700 stores. (As of October 1, 2016 the company operates 928 retail stores across 48 states and the District of Columbia.)



Ulta’s expansion will take place both in smaller markets and in urban markets. While Ulta stores average 10,000 sq. ft., the retailer is not ruling out opening smaller stores in the future, according to the Chicago Tribune.



For the fiscal third quarter, Ulta now expects same-store sales, including online sales, to rise 14% to 15%, compared to previous guidance of 11% to 13%.



Earnings per share are estimated to be in the range of $1.35 to $1.38, versus prior guidance of $1.25 to $1.30. Ulta reported $1.11 in EPS for the third quarter of last year.



For the full year, Ulta raised its comp-sales growth to approximately 12% to 14%, compared to previous guidance of 11% to 13%. The company said it expects to deliver earnings per share growth in the mid-twenties percentage range, compared to previous guidance of low to mid-twenties percentage range.



“We are confident that executing against our strategic imperatives will continue to drive excellent financial results and create sustainable, long term shareholder value,” said Mary Dillon, CEO, Ulta.



In other news from the investors meeting, Ulta has expanded its partnership with Google Express, which offers fast delivery service to customers, into about 20 states. It also will introduce a mobile app that lets people test makeup virtually.