Ulta's net sales increase in the quarter, partially due to the strong performance of new stores.
Ulta Beauty posted another solid quarter with revenue and same-store sales up year-over-year.
With beauty remaining one of retail's most resilient categories even as consumers cut back on other discretionary purchases, the beauty giant increased the bottom end of its range for full-year sales and earnings expectations. Ulta executives on the earnings call noted the holiday season is off to a "good start."
Ulta's net income was $249.5 million, or $5.07 per share, for the quarter ended Oct. 28, compared to $274.6 million, or $4.94 per share, in the year-ago period.
Gross profit increased to $992.1 million compared to $962.8 million. As a percentage of net sales, gross profit decreased to 39.9% compared to 41.2%, which Ulta said was due to lower merchandise margin, higher inventory shrink, and higher supply chain costs, partially offset by strong growth in other revenue.
Net sales at Ulta increased to $2.5 billion from $2.3 billion, primarily due to increased comparable sales, strong new store performance and significant growth in other revenue. Comparable sales (including e-commerce sales) rose 4.5%, driven by a 5.9% increase in transactions and a 1.4% decrease in average ticket.
“The third quarter represented another strong performance by the Ulta Beauty team, as sales, gross profit, and diluted EPS all exceeded our internal expectations," said Ulta CEO Dave Kimbell. "Our traffic trends remained healthy, our brand awareness increased, and we expanded our loyalty program to a record 42.2 million members. As we look to the future, the outlook for the beauty category is bright, and I am confident Ulta Beauty has the right plans in place to delight our guests this holiday season, expand our leadership position in specialty beauty retail, and deliver long-term shareholder growth.”
In the third quarter, Ulta opened 12 new stores, relocated two stores and remodeled 11 stores. At the end of the quarter, the Bolingbrook, Ill.-based company operated 1,374 stores totaling 14.4 million square feet.
Ulta in CFO shuffle
In other news, current Ulta Beauty CFO Scott Settersten has informed the company of his decision to retire as CFO, treasurer and assistant secretary after nearly 20 years with the nation’s largest specialty beauty retailer, effective April 1, 2024.
Paula Oyibo, who presently serves as senior VP of finance at Ulta Beauty, will succeed Settersten as CFO and will report to Dave Kimbell, CEO.