Ulta Beauty posts increases across the board in Q2

By

Obi Anyanwu

Published
Aug 28, 2016

Ulta Beauty released its second quarter 2016 results on Thursday. The company achieved top and bottom line performance growth, which, according to CEO Mary Dillon, is a reflection of, “a strong pipeline of newness and innovation in merchandising, progress in growing our brand awareness, major milestones related to our loyalty program, continued rapid growth in our e-commerce business, and successful execution of our supply chain investments.”

 
Net sales increased 21.9% to $1,069.2 million from $877.0 million in the prior second quarter. Comparable sales increased 14.4% driven by 9.7% growth in transactions and 4.7% growth in average ticket, and retail comparable sales increased 12.6% including salon comparable growth of 8.0%.
 
Second quarter salon sales increased 14.3% to $59.0 million from $51.6 million in the prior year and e-commerce sales grew 54.9% to $55.9 million from $36.1 million.

Improvements in merchandise margins helped gross profit increase 110 basis points to 36.0% and SG&A expense as a percentage of net sales increased 110 basis points to 22.1%. Net income increased 21.3% to $90.0 million compared to $74.2 million in the previous year and income per diluted share increased 24.3% to $1.43 from $1.15.
 
For the first six months ended on July 30, 2016, net sales increased 22.8% to $2,142.9 million from $1,745.1 million, comparable sales increased 14.8%, retail comparable sales increased 13.3%, salon sales increased 14.5% to $117.9 million and e-commerce comparable sales increased 46.0% to $116.9 million from $80.1 million in the prior period.
 
Net income for the first six months also increased 29.0% to $182.0 million from $141.1 million in the previous period and income per diluted share for the period increased 32% to $2.89.
 
During the second quarter, Ulta Beauty closed 3 stores and opened 24 stores ending with 907 stores and an 11% increase in square footage to 9,555,192 square feet.
 
Ulta beauty expects its third quarter net sales to be in range of $1,072 million and $1,090 million and income per diluted share to be in range of $1.25 to $1.30. The company also raised its fiscal 2016 outlook and now expects comparable sales, including e-commerce sales, to increase to 11% or 13%.