Ulta Beauty’s hot streak continues.
The beauty retailer posted sales and earnings gains for its first fiscal quarter, including a more than 70 percent increase in e-commerce sales.
That jump was bolstered by investments Ulta made in previous quarters, according to chief executive officer Mary Dillon. “Because of our supply chain investments, we’re able to fulfill what the guest wanted,” she said. “We’re probably benefitting from some newer digital marketing tools we implemented last year,” she added, noting that things like paid search have improve e-commerce operations.
In the quarter, 8.5 percent of Ulta’s customers were omnichannel shoppers, Dillon said, shopping both online and in store. The company’s loyalty program members (there are TK percent more of them, bringing the total to 24.5 million, the company said) are also big shoppers.
“Some are coming in for new prestige brands, many are coming in for the first time and buying mass products,” said chief merchandising and marketing officer Dave Kimbell. “Adding brands anywhere in the house can help us attract new customers … Ulta Beauty does a great job of introducing customers to prestige brands – often our gusts that come in and buy mass discover [prestige brands in the portfolio] for the first time.”
Brand wise, Tarte, Too Faced, Mario Badescu, Anastasia Beverly Hills, Clinique, Lancôme, Tony Moly, Yes Too and the Ulta Beauty collection were among best performers, Dillon said. IT Cosmetics’ Confidence in a Compact Pressed Serum Foundation, Too Faced’s Peanut Butter and Honey Palette, Be Legendary lip products, Becca’s Sunchaser Bronzing Palette, Stila eye shadow products and Estée Lauder lipstick collection did well, she added.
In terms of new brands, Ulta added Nudestix and Cover FX to its prestige assortment, and Skinfood and Derma-E in mass, while Nars, Origins, Drybar and Estée Lauder expanded to additional doors. Ulta also launched MAC Cosmetics on its website, which Dillon noted was “off to a very strong start.”
For the quarter, Ulta posted net income of $128.2 million, up 39.4 percent from $92 million in the prior-year period. Net sales increased 22.5 percent year-over-year, to $1.3 billion from $1.07 billion. Diluted earnings per share was up 41.4 percent to $2.05. E-commerce sales increased 70.9 percent to $104.3 million from $61 million in the first quarter of 2016. Salon sales gained 16.7 percent to $68.7 million from $58.9 million in the prior-year period.
For the second quarter, Ulta is projecting net sales between $1.256 billion and $1.278 billion. Comparable sales are expected to be up 10 percent to 12 percent. Income per diluted share is expected to be between $1.72 to $1.77. For the full year, Ulta projects comparable sales gains of between 9 percent and 11 percent, up from previous guidance of between 8 and 10 percent growth. The company projects e-commerce sales will be up 50 percent, up from 40 percent.