Ulta Beauty started the year strong as sales jumped 65%, fueled by rising consumer confidence, stimulus checks, the easing of COVID-19 restrictions and returning store shoppers.
The first quarter marked the beauty giant’s last quarter under the stewardship of Mary Dillon, who will turn the CEO baton over to Ulta president Dave Kimbell next week, after the chain’s annual shareholder meeting. Dillon will transition to the role of executive chair.
On the company’s earnings call, Kimbell said that Ulta’s sales were strong across channels, with stores leading the way “as consumers were increasingly comfortable with shopping in stores.”
“As local restrictions lifted, we increased our operating hours and welcomed brand partners back to stores, and as store traffic trends improved, we adjusted staffing levels to support the increased demand,” he said.
Net sales increased 65.2% to $1.93 billion in the quarter ended May 1, topping Street expectations of $1.64 billion. By comparison, Ulta reported $1.74 net sales in the first quarter of 2019.
Comparable sales increased 65.9% compared to a decrease of 35.3% in the first quarter of fiscal 2020, driven by a 52.5% increase in transactions and an 8.8% increase in average ticket. Compared to the first quarter of fiscal 2019, comparable sales increased 7.0%.
Net income totaled $230.3 million for the quarter compared to a loss of $78.5 million in the prior-year quarter. Adjusted earnings were $4.07 per share, more than double analysts’ expectation of $1.95.
“We have emerged from 2020 with strong momentum in our sales trends, market share gains, and consumer sentiment,” said Kimbell. “As increasing consumer confidence, the relaxation of restrictions, and a desire for newness drive increased engagement with the beauty category, our differentiated model, combined with our ongoing efforts to create meaningful guest connections, position us well to lead through the category recovery.”
Ulta raised its guidance and is now predicting between $7.7 billion in net sales for fiscal 2021, up from $7.2 billion to $7.3 billion.
The company ended the first quarter with 1,290 stores.