ULTA Beauty announced Sept. 11 financial results for the 13-week period and 26-week period that ended Aug. 2, which compares to the same periods that ended Aug. 3, 2013.
“We are delighted to announce excellent second-quarter results and our more optimistic view of sales and earnings growth for 2014,” said CEO Mary Dillon. “A significant improvement in traffic, successful new-product and brand launches, and rapid ecommerce growth drove better-than-expected top-line performance. As a result, the ULTA team delivered healthy operating margin expansion in the second quarter. We are raising our outlook for the year and now expect to achieve sales and earnings per share growth in the 20% range, reflecting our confidence in continued strong market-share gains.”
- Net sales increased 22.2% to $734.2 million from $601 million in the second quarter of fiscal 2013.
- Comparable store sales (sales for stores open at least 14 months plus ecommerce sales) increased 9.6%, compared to an increase of 8.4% in the second quarter of fiscal 2013. The same store-sales increase was driven by a 5.8% growth in transactions and a 3.8% jump in average ticket.
- Ecommerce comparable sales grew 54.9%.
During the second quarter, the company opened 19 stores in Alexandria, Louisiana; Casper, Wyoming; Colorado Springs, Colorado; Compton, California; Freehold, New Jersey; Hyannis, Massachusetts; Jefferson City, Missouri; Keene, New Hampshire; Lawton, Oklahoma; Marlboro, New Jersey; Pickerington, Ohio; Pinole, California; Salt Lake City; San Jose, California; Syracuse, New York; Valdosta, Georgia; Viera, Florida; Westminster, Colorado; and Winston-Salem, North Carolina.
The company ended the quarter with 715 stores across 47 states with a square footage of 7,575,236—which represents a 17% increase in square footage, compared to the second quarter of fiscal 2013. ULTA Beauty also sells its products through its www.ulta.com website.
First Six-Months Highlights
- Net sales increased 22.3% from the first six months of fiscal 2013.
- Comparable store sales (sales for stores open at least 14 months plus ecommerce sales) increased 9.2%, compared to an increase of 7.6% in the first six months of fiscal 2013.
- Ecommerce comparable sales grew 63.8%.
Fiscal 2014 Guidance
In addition, the company is raising its previously announced fiscal 2014 guidance. Its plans now include to:
- Achieve comparable store sales growth of about from 7% to 8%, including the impact of the ecommerce business.
- Expand square footage by approximately 15% with the opening of 100 new stores.
- Increase total sales in the 20% range.
- Remodel 12 locations.
Long-Term Strategic Plan
The company has also completed its long-term strategic plan, identifying six strategies that it believes will be the foundation for continued strong performance:
- Acquire new guests and deepen loyalty with existing guests.
- Differentiate by delivering a distinctive and personalized guest experience across all channels.
- Offer relevant, innovative and often exclusive products that excite its guests.
- Deliver exceptional services in three core areas: hair, skin health and brows.
- Grow stores and ecommerce to reach and serve more guests.
- Invest in infrastructure to support its guest experience and growth, and capture scale efficiencies.
Five-Year Financial Targets
Additionally, the company stated five-year financial targets supported by strategies that include:
- Deliver annual comparable sales growth between 5% and 7%.
- Open about 100 stores per year.
- Grow ecommerce to represent 10% of sales.
“We believe this strategic plan will deliver results that place ULTA Beauty in the top tier of high-performing retailers,” added Dillon. “We plan to make significant investments in [our] supply chain and systems, as well as in improving the guest experience, to allow ULTA Beauty to continue its rapid market-share gains and deliver strong, sustainable sales and earnings growth.”
[Image courtesy of ULTA Beauty]