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Ulta Beauty Posts Major 2021 Sales Jump

The CEO expects consumers to maintain self-care routines and become more resilient to COVID-19 surges.

Beauty consumers are back, judging from Ulta Beauty’s latest financial results.

The beauty retailer said higher consumer confidence, government stimulus payments and easing COVID-19 rules led to a major jump in sales — 40.3 percent — for the latest fiscal year.

For the 52 weeks ended Jan. 29, Ulta had $8.6 billion in net sales, up from the prior-year’s $6.15 billion, with net income of $958.8 million. The year also surpassed sales during the period before the pandemic started, which were about $7.4 billion.

For the fourth quarter, Ulta said sales increased 24.1 percent to $2.7 billion. Net income increased to $289.4 million, compared to $171.5 million in the prior-year period.

Ulta, which now has 1,308 stores, is projecting between $9.05 billion and $9.15 billion in sales for the next fiscal year.

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On the company’s earnings call Thursday, chief executive officer Dave Kimbell outlined Ulta’s plans for future growth, which include an investment in New Voices, a venture capital fund set up by Richelieu Dennis.

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“This year we plan to continue to amplify underrepresented voices through media investments with multicultural platforms, the expansion of our music platform and increase brand marketing support for Black-owned, Black-founded and Black-led brands within our assortment, build an ecosystem to support the pipeline of BIPOC [Black, Indigenous and people of color] brands, including the creation of an accelerator program focused on early-stage beauty brands to educate, inspire and support brand participants to prepare for retail,” Kimbell said.

Ulta has signed the 15 Percent Pledge and added several Black-owned brands to the lineup, including Black Girl Sunscreen, Camille Rose, Homebody and Black Opal.

Ulta has continued to add brands across its assortment, including Olaplex and Fenty Beauty, which achieved “higher mention volume and reach than any other Ulta Beauty brand launch announcement,” Kimbell said. The Olaplex launch was “one of the strongest brand launches in Ulta Beauty history,” Kimbell said.

In makeup, Ulta added No. 1 by Chanel in 250 stores and online and is “pleased with initial results,” Kimbell said. In sunscreen, Ulta launched Supergoop.

Going forward, Ulta has plans to continue scaling. Kimbell said the retailer sees consumers becoming “increasingly resilient” to COVID-19 surges and global uncertainty, and that Ulta expects “the recovery which began last year will continue in 2022 as consumers maintain their self-care routines and engage more in social activities.”

Broadly, makeup remained challenged and “volatile,” Kimbell said, especially in comparison to other segments. He said he is “confident that makeup will return to growth as consumer optimism and conform with out-of-home activities increases.” Blush, tinted moisturizer, lip balm and lash products sold well, Kimbell said, and mass makeup did well.

Hair is growing quickly, and made up 20 percent of net sales in the latest quarter, Kimbell said, driven by consumer focus on hair health. Fragrance was the best-performing category in the quarter, he said, and made up 18 percent of net sales during the latest quarter. Skin care also grew, driven by moisturizers, cleansers and sun care.

Ulta plans to continue expanding shops-in-shop with Target to at least 250 more stores this year, and will test small-format locations, too, Kimbell noted.

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