Ulta Beauty posted robust sales and earnings for the fourth-quarter and year-end period as gross margins grew and same-store and e-commerce sales showed double-digit gains.
As a result, the company said it was committed to growing online sales and adding 100 units this year as well as launch a $200 million accelerated share repurchase program.
For the quarter ended Jan. 30, net sales jumped 21.1 percent to $1.27 billion from $1.04 billion in the same period last year as net income rose 23.6 percent to $107.8 million, or $1.69 per share, from $87.3 million, or $1.35 per share. For the year-end period, net sales also rose 21.1 percent to $3.92 billion from $3.24 billion in the prior year as net income increased 24.5 percent to $320 million, or $4.98 per share, from $257.1 million, or $3.98 per share. Earnings were ahead of analysts’ estimates.
Behind the quarterly results were gross margins that increased to 34.6 percent from 33.4 percent. Same-store sales (retail stores and e-commerce) gained 12.5 percent in the quarter while retail only comps showed a 10.4 percent gain. E-commerce sales jumped 44.2 percent in the quarter to $94.8 million.
Mary Dillon, chief executive officer, said fourth-quarter results “capped an exceptional year during which we made significant progress against our strategic imperatives, while achieving outstanding sales and earnings growth. We continue to benefit from the powerful combination of strong demand in the beauty category and Ulta Beauty’s highly differentiated offering that propels our business to transcend prevailing trends across the retail landscape.”
The gross profit gain of 120 basis points in the quarter was “due to increased merchandise margins, an improvement in e-commerce profit contribution, and leverage in fixed store costs, offset by supply chain investments including the Greenwood, Indiana, distribution center,” the retailer noted.
Looking ahead, the company said it expects to post earnings per share “growth in the range of 18 to 20 percent” this year, which includes “the impact of the new Dallas distribution center, the accelerated rollout of prestige brand boutiques, the accelerated share repurchase program, and continued open market share repurchases,” among other initiatives.