Fresh from international expansion, launching a marketplace and revealing plans for a new Times Square flagship in New York City, Ulta Beauty topped Wall Street estimates on the top and bottom lines in the second quarter and lifted its full-year forecasts.
The Bolingbrook, Ill.-based beauty retailer reported that net sales increased 8.9 percent to $3 billion in its second quarter ended Aug. 1, primarily due to increased comparable sales, the acquisition of Space NK, and sales from new stores. Analysts forecast sales of $2.98 billion.
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Comparable sales grew 3.8 percent, while diluted earnings per share increased 13.3 percent to $6.55, above analysts’ estimates of $6.20.
“Our team delivered another impressive quarter of strong sales, profit and earnings growth, demonstrating that we are executing with discipline and translating our Ulta Beauty Unleashed strategy into tangible benefits for our guests,” said Kecia Steelman, president and chief executive officer. “We continue to strengthen our position as the ultimate beauty discovery destination, leveraging our unique understanding of our guests to drive excitement and growth through compelling innovation, value, experiences and convenience.”
During a call with analysts, she highlighted fragrance and K-Beauty as performing particularly well during the quarter, boosted by new launches.
Providing an update on Ulta’s international expansion progress, Steelman noted that the total store count in Mexico is now 12, while in the Middle East, its franchise partner Alshaya is working on several new store openings planned for later this year.
“We are navigating the ongoing geopolitical environment in partnership with Alshaya and remain optimistic about the expansion opportunities in the region over the long term,” said Steelman, addressing the war in the Middle East.
As for Ulta Beauty Marketplace, it closed the quarter with more than 450 brands and over 12,000 stock keeping units.
As a result of strong second-quarter sales, the company updated its net sales forecast for the year to growth between 6.7 percent and 7.2 percent, from its previous estimate of 6 percent to 7 percent.
Steelman continued: “With our strong first-half performance, we have raised our financial guidance for the year, reflecting our confidence in our strategic priorities and our ability to drive profitable growth and long-term value for all stakeholders in a dynamic environment.”
Ulta Beauty officially exited Target Corp. this month, having debuted their shop-in-shop concept in 2021 to much fanfare. The partnership struggled in later years with intense competition from Sephora’s partnership with Kohl’s and more recently Amazon’s push into prestige beauty. This week Target unveiled its own stand-alone beauty concept — Target Beauty Studio.
