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.
@margotrobbie steps out onto the red carpet wearing @miumiu. The actress is nominated for “Outstanding Performance by a Female Actor in a Leading Role” in “I, Tonya” at the #SagAwards. (📷: Stewart Cook) #wwdfashion
For @massimogiorgetti of @msgm, the Nineties are his favorite decade. “They had a huge impact on my personal growth. What I like of the Nineties is that they are not so precise in terms of style as other decades…there was actually a bit of everything,” he said. As seen on MSGM’s Spring 2018 show: tie-dye and a bit of grunge, two styles that are synonymous with the decade #wwdfashion #wwddecades (📷: @kukukuba)
Breaking News: @hedislimane joins @celine as its new artistic, creative and image director. One of fashion’s preeminent image-makers and trendsetters, Slimane is to join the LVMH brand on Feb. 1 and unveil his first fashion proposition for men and women next September during Paris Fashion Week. It marks a major homecoming for Slimane, who cemented his reputation – and influenced men’s tailoring for more than a decade – as the designer of Dior Homme between 2000 and 2007. He went on to reinvent and ignite the house of Yves Saint Laurent, which he rechristened Saint Laurent, between 2012 and 2016 – all the while maintaining a close relationship with the Arnault family, which controls LVMH and Dior. Read the full exclusive story on WWD.com. Link in bio. #wwdnews #wwdfashion
“Personally I believe the Eighties have been the richest and more vivacious period for international fashion,” Giorgio Armani said when asked what his favorite decade of fashion is. It was a moment of disruption and experimentation and only thinking back to the first years of that decade is always an emotion for me, for what they have meant to me and my work.” The influence is clear in @giorgioarmani spring 2018 collection, pictured here, which was full of bright colors and unexpected prints. Read more about which decades designers loved most on WWD.com #wwdfashion #wwddecades (📷: @aitorrosasphoto)
For Lady Gaga’s only Italian show on her “Joanne World Tour,” the singer wore a range of @versace_official outfits. The standout piece: this custom-made bodysuit inspired by the brand’s spring 2018 collection. #wwdfashion (RG: @ladygaga)
@_camillaruth_ is expanding on the wellness-craze concept with @westbourne – a new NYC restaurant that’s both a healthy-minded café as well as a business that gives back to the community. Marcus works with the Robin Hood foundation to give back to The Door, a non-profit providing youth development services, and also hires employees through The Door. Read our full interview with Marcus on giving back through food on WWD.com. #wwdeye (📷: @lexieblacklock)