Ulta racks up another gorgeous quarter

Ulta Beauty's formula of one-stop shopping for prestige, mass and salon beauty products continued to produce impressive sales and earnings growth in the third quarter.



Ulta' s net income increased 20.2% in the quarter, to a better-than-expected $71.1 million, from $59.1 million in the year-ago period. Total sales rose 22% to $910.7 million, also more than expected. Online sales surged 56.3% to $46.2 million. Same-store sales were up 12.8%, driven by a 10.6% increase in transactions and 2.2% growth in the average ticket.



“Ulta Beauty’s excellent performance in the third quarter was highlighted by top line momentum driven by double digit traffic growth, leading to above-plan earnings growth,” said Mary Dillon, CEO. “As a result of our financial performance in the third quarter and our position of strength heading into the holiday season, we are raising our guidance and now expect our 2015 full year earnings growth rate to be in the low twenties.”



One reason for Ulta's success may be the retailer's personalized in-store experience, which cannot be duplicated by Amazon or other Internet retailers. Which is not to say the company is ignoring e-commerce. Indeed, Ulta is managing to win at both store and online traffic, a difficult feat in the current retail environment.



During the third quarter, the company opened 45 new stores for a total of 860 stores, which represented a 12% increase in square footage compared to the year ago period.



For the fourth quarter the company expects net sales in the range of $1,212 million to $1,233 million, compared to actual net sales of $1,047.6 million in the fourth quarter of fiscal 2014.