Ulta Beauty Q3 earnings, sales top Street; raises full-year outlook
Ulta Beauty reported better-than-expected earnings and sales for its third quarter but warned of a still-challenging environment.
“As we shared on our last call, we are navigating a number of headwinds, including the normalization of the U.S. beauty category a dynamic consumer environment, and elevated competition, particularly in prestige beauty,” CEO Dave Kimbell told analysts on the company’s earnings call.
While the headwinds have not abated, Kimbell said Ulta is starting to see benefit from actions it is taking to reinforce its market position and improve its performance.
The beauty giant reported net income of $242.2 million, or $5.14 per share, for the quarter ended Nov. 2, compared with $249.5 million, or $5.07 per share, in the year-ago period. The results topped Wall Street expectations of $4.54.
Net sales increased 1.7% to $2.53 billion compared to $2.49 billion, primarily due to new store contribution, partially offset by a decline in other revenue. Analysts had expected sales of $2.50 billion. Fragrance was Ulta’s strongest category, driven by men's fragrance, gender-neutral fragrances, and new products, including new fall and holiday gift sets.
Comparable sales (includes e-commerce sales) increased 0.6%, driven by a 0.5% increase in transactions and a 0.1% increase in average ticket.
“The Ulta Beauty team delivered better-than-expected sales and profitability reflecting improved sales trends and strong financial discipline,” Kimbell said in the earnings release. “As we look to the remainder of fiscal 2024, we are focused on executing with excellence across our key initiatives to deliver in a dynamic environment. We remain confident that our model and strategies will drive long-term profitable growth and share leadership by enhancing our position as the destination for beauty enthusiasts for a lifetime.”
[READ MORE: Ulta Beauty plans to open 400 new stores, hit 50M loyalty members]
Ulta slightly raised its full-year forecast, with sales now expected to fall between $11.1 billion and $11.2 billion, up from $11 billion to $11.2 billion. Earnings are expected to range between $23.20 and $23.75, up from $22.60 to $23.50.
The company opened 28 new stores, remodeled 27 stores and closed two stores during the quarter, for a total of 1,437 stores.
