Ulta: A thing of beauty

Ulta Beauty is continuing to deliver blockbuster financial results by attracting blockbuster numbers of shoppers to its stores.

The beauty retailer reported a 7% increase in customer traffic for the second quarter ended Aug. 1 and average spending rose by 3%. The companyalso raised its outlook for the second time this year: Comps are now targeted at rising 9%, rather than the 8% the Ulta team forecast in May.

“The Ulta Beauty team achieved outstanding results in the second quarter, with top line momentum delivering better than expected earnings growth,” said CEO Mary Dillon. “Strong traffic growth drove healthy comparable sales increases across stores, salon and e-commerce, while average ticket growth also contributed. An exciting pipeline of new products, combined with increasing effectiveness of our marketing strategies, drove market share gains across all categories. In light of the excellent performance of the business in the first half of the year, we are raising our outlook for the full year and now expect to achieve earnings per share growth in the high teens.”

Net sales increased 19.4% to $877.0 million from $734.2 million in the second quarter of fiscal 2014. Same store salesincreased 8.9% compared to an increase of 9.6% in the second quarter of fiscal 2014.Net income increased 22.0% to $74.2 million compared to $60.8 million in the second quarter of fiscal 2014; andIncome per diluted share increased 22.3% to $1.15 compared to $0.94 in the second quarter of fiscal 2014.

The retailer's online business also posted strong results, rising 43% to make a solid contribution to overall comps growth: Online sales accounted for 1.2 percentage points out of the total 10% comps growth.

During the second quarter, the company opened 20 new stores and ended the second quarter with 817 stores and square footage of 8,628,213, representing a 14% increase in square footage compared to the second quarter of fiscal 2014.

For the third quarter of fiscal 2015, the company expects net sales in the range of $869 million to $883 million, compared to actual net sales of $745.7 million in the third quarter of fiscal 2014.