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Ulta Beauty Reaches Nearly $2 Billion in Quarterly Sales

Ulta's sales leapfrogged pre-COVID-19 levels.

Ulta Beauty sales jumped in the most recent quarter, as consumers went back into stores to go beauty shopping.

Chief executive officer Dave Kimbell said on the company’s earnings call Wednesday that consumer confidence, optimism and comfort shopping in stores “continues to increase.” 

“We’re seeing more of our members return to stores. Traffic trends in stores improved from the first quarter, but remained lower than 2019 levels,” he said. 

“The beauty category is recovering faster than we expected, and the investments we’ve made over the last year to adapt to the market disruption and strengthen our leadership position are delivering results,” Kimbell said.

Ulta’s earnings came on the heels of the company opening 58 shop-in-shops with Target, featuring brands including MAC and The Ordinary.

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For the quarter ended July 31, Ulta posted nearly $2 billion in net sales, compared to $1.2 billion in the prior-year period. The latest figures are 6.2 percent higher than in the same period in 2019, before the coronavirus pandemic took hold. Net income for the latest quarter was $250 million, up from $8 million for the quarter in 2020.

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With more customers in Ulta stores, e-commerce sales were lower, Kimbell said. About 20 percent of online shoppers are using the buy online, pick up in store offering, he added, which allows customers to pick up products within two hours.

While the beauty industry has been buzzing about a makeup renaissance, Kimbell said that Ulta’s makeup sales are not yet back to 2019 levels. He did say that “momentum is building with both the mass and prestige categories,” and that sales have improved from prior quarters, with growth in face, lip and continued strength in eye makeup. 

“We’re encouraged by what we see,” Kimbell said. “We had weeks and times during the quarter that it was positive versus 2019,” noting that there have been more usage occasions.

Recently, Ulta launched Bobbi Brown, Elaluz and Undone Beauty. 

Skin care continues to do well, and Kimbell said the category posted double-digit growth compared to 2019. Kimbell said Ulta shoppers are connecting skin care and self care, and that people are not giving up their skin care routines, even as they start spending more on makeup. Moisturizers, serums and cleaners drove growth, as did niche categories like sun care and self tanner, Kimbell said.

In the third quarter, Ulta is planning to bring back skin services in select stores, with new services offered around specific concerns, including hydration, antiaging and acne. The retailer will also test micro-channeling, dermaplaning and HydraFacials.  

In hair, Ulta launched an event meant to convert non-hair shoppers, which helped drive growth. Fragrance sales were strong, with Marc Jacobs and Carolina Herrera driving sales, as well as body scrubs and moisturizers.

Ulta has recently branched more into wellness, and said that 65 percent of its shoppers “believe beauty is significantly connected to wellness,” Kimbell said. “This quarter, we launched the wellness shop in select stores and on ulta.com.” 

The retailer is also joining in on the live streaming trend, and has partnered with Supergreat for shoppable videos and exclusive product drops.

The retailer has upgraded its financial outlook based on the results, and is now projecting sales between $8.1 billion and $8.3 billion for the year.

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