Beauty retailer Ulta Salon, Cosmetics & Fragrance Inc., which reported financial results for the first time as a public company Tuesday, posted robust earnings and a 6.7 percent rise in comparable-store sales for the third quarter ended Nov. 3.
Quarterly profits increased 16.3 percent to $4.2 million from $3.6 million during the quarter ended Oct. 28 of last year as sales rose 25.4 percent to $208.2 million from $166.1 million.
The 237-store chain, which raised $123.9 million during an initial public offering on Oct. 30, attributed comp-store sales growth to "solid gains" in customer traffic, average ticket growth, double-digit comps in the prestige category and strength in its salon business.
Ulta's president and chief executive officer, Lyn Kirby, expressed optimism during a conference call with Wall Street analysts Tuesday by saying that, despite a softer economy, the beauty category would continue to perform.
Women "will let go of some things" during a slower economic cycle, said Kirby, with the exception of shampoo and lipstick. "[Beauty] is a necessity for her in many instances and not just a luxury experience. We'll see resiliency as we have historically in a soft economy."
Kirby said she is keeping a close eye on "overall traffic to the store" rather than shifts in individual beauty categories like fragrance, color cosmetics, hair care, skin care and salon products. "There is a lot of competition from all [of retail]," she said. "There is a lot of promotional activity going on. We are far more cognizant of being competitive in the marketplace."
She added, however, that she anticipates fragrance sales coming later in the selling season and that her biggest concern is a weather-related disruption in store traffic right before Christmas.
During the third quarter, Ulta opened 26 new stores, remodeled seven stores and entered Alabama, Ohio, Tennessee and Massachusetts, bringing the number of states it operates in to 30. The firm plans to open 12 more stores in the fourth quarter and to end the 2007 fiscal year with 249 stores, which would amount to a 28 percent increase in total square footage to 2,589,794 square feet.
The aim, according to Kirby, is to grow Ulta's store base to 1,000 locations within the next 10 years.
The retailer, which relaunched its Web site on Nov. 16, has begun carrying brands like Dermalogica, Juicy Couture and Jessica Simpson's Hair Do hair extensions. The Stila color cosmetics brand, which is being tested in 30 Ulta stores, is to be rolled out next year, said Kirby.
For the first nine months of the fiscal year, profits were down 8.9 percent to $11.7 million from $12.9 million a year ago on higher selling, general, administrative and pre-opening expenses. Revenues for the first nine months reached $602.8 million, a 23.5 percent increase from $488.1 million in the prior year.
The retailer is forecasting fourth-quarter comp-store growth of 4 to 6 percent on sales of $304 million to $310 million and expects diluted earnings per share to be 22 cents to 24 cents.
For the full year, Ulta estimates comp-store gains of 6.2 to 6.9 percent on sales of $907 million to $913 million. Profits are expected to be in the range of 47 cents to 49 cents a share.
The annual Veuve Clicquot Polo Classic in Pacific Palisades this weekend drew Kate Hudson, Tracee Ellis Ross, Laura Dern and more. See pictures of the star-studded event on WWD.com. (📷: @chelsealaurenla) #wwdeye
In his new book “Hollywood Royale,” Andy Warhol’s Protégé Matthew Rolston celebrates the Eighties revival of Hollywood glamour. Featuring more than 100 portraits taken by Rolston from 1977 to 1993, the book contains photos of icons like Michael Jackson, Cyndi Lauper, and @drewbarrymore, pictured here in 1991. “Hollywood Royale,” out today, will be accompanied by an exhibition opening at Los Angeles’ Fahey/Klein Gallery on March 1. #wwdeye
"Nowadays when life is not so happy with everything going on in the world, I think people come to me for a little bit of whimsy and color and fun." - Designer Rebecca De Ravenel on her cult-favorite jewelry line. (📸 : @vsteves) #wwd40
“Everyone is talking about how the retail industry is struggling, but I think it’s an incredible time because brands who are doing something different and innovative are setting themselves up for the future,” said @adamgoldston, who founded the luxury athletic brand @apl with his brother @ryangoldsten. The Goldston’s are part of WWD’s 40 under 40: a group of industry notables. See the rest of the list on WWD.com. (📷: @vsteves) #wwd40
@eyeswoon blogger Athena Calderone debuted her first-ever cookbook, “Cook Beautiful,” which is heavily centered on the presentation and visual expression of food. Pictured here are her miso glazed carrots from the book. Get the recipe on WWD.com. (📷: @johnny_miller_) #wwdeye
“It’s passion that helps get anybody to a certain point and it’s what’s propelled me,” said Kith founder @ronniefieg, one of WWD’s 40 under 40: a group of industry notables who are changing the face of retail, fashion and beauty. Fieg, who opened a Manhattan flagship on October 7, began his career at age 13 as a stock boy and salesman for footwear chain David Z. “I think staying true to [my] beliefs, hard work and passion have gotten me to where [Kith] is today.” See the rest of the 40 at WWD.com. (📷: @vsteves) #wwd40
25-year-old @samweaving is about to break out this fall, starring in Netflix’s horror film “The Babysitter,” fittingly out today on Friday the 13th. That’s not the only place you’ll be seeing her, though — Weaving’s got a role Showtime’s “SMILF” and another alongside Frances McDormand and Woody Harrelson in “Three Billboards Outside Ebbing, Missouri.” Though she’s got a full plate at the moment, there’s one role she’s got her eye on: Marilyn Monroe. “I’m a little too young at the moment, but it’s on my bucket list,” the actress told WWD (📷: @dandoperalski) #wwdeye
BFF's Poppy Jamie and Suki Waterhouse celebrated the launch of their bag line Pop x Suki at Nordstrom last night. "The line is really about our friendship, and how we are so different but complement each other," said Waterhouse. 👯 (📷: Katie Jones) #wwdeye
After designing the new @louisvuitton and @bulgariofficial flagships and a @chanelofficial boutique opening in Japan, @petermarinoarchitect has another project on his plate: The Lobster Club. Located in the Seagram Building, it’s the famed architect’s first restaurant project in New York, serving up modern Japanese brasserie-style cuisine. Bronze hues, bespoke material detailing, blush and chartreuse tones and a heavy emphasis on Picasso can be seen throughout. Mark your calendars for Nov. 1 for the much-anticipated opening. (📷: @clint_spaulding) #wwdeye