Ulta Beauty’s growth tear continued in the first quarter, with net income surging 34 percent.
The Bolingbrook, Ill.-based retailer, which reported quarterly results late on Thursday, said its net income was $66.9 million, or $1.04 a diluted share, compared with $50 million, or 77 cents, in the year-ago period. Sales for the three months ended May 2 gained 21.6 percent to $868.1 million from $713.8 million. Comparable sales increased 11.4 percent, driven by 7.2 percent growth in transactions and a 4.2 percent gain in average ticket size.
“We achieved our best comparable sales growth since 2011, driven by strong traffic growth in both retail and e-commerce, market share gains across all categories, and continued successful execution of our marketing strategies,” said Mary Dillon, Ulta’s chief executive officer. “We also drove significant operating margin expansion, with a healthy balance of product margin improvement and marketing and payroll expense leverage.”
Ulta accelerated the growth of its e-commerce business in the quarter, with sales gaining 49.8 percent to $44 million. Online sales were boosted by the addition of Lancome and professional hair care brands to ulta.com, said Dillon.
The retailer’s loyalty program, called ULTAmate Rewards, grew to 15.5 million active members.
The company is making good on its efforts to let more consumers know that it offers beauty services in its stores. Salon sales gained 20.5 percent to $51.3 million in the first quarter. Dillon said that two-thirds of online bookings for hair appointments were from new salon customers.
It is also increasing its focus on offering exclusive products, tagging items “new” and “only at Ulta” throughout the store.
Ulta opened 24 stores during the quarter and closed one, compared to 21 stores in year-ago quarter. It ended the quarter with 797 stores.
For the second quarter, the company expects net sales in the range of $854 million to $868 million. Comps, including e-commerce sales, are forecasted to increase 7 to 8 percent.
Ulta raised guidance for the year, and now expects to open 100 new doors, remodel four locations, grow e-commerce sales in the 40 percent range and comps by about 7 to 9 percent.