Ulta’s Q1 sees serious growth in online, in-store sales

BOLINGBROOK, Ill. — Ulta Beauty came out of the first quarter starting gate strong, with earnings that easily topped Wall Street estimates and big increases in store and online sales. 

While online sales are growing at a fast pace, the beauty products and services retailer isn't slowing down its store growth. It said it will open 100 new stores in its current fiscal year.

Ulta reported that its net income increased 39.4% to $128.2 million for the quarter ended April 30, compared to $92.0 million in the year-ago period. The retailer posted earnings of $2.05 a share, easily beating analysts’ estimates of $1.80 per share.

Net sales increased 22.5% to a better-than-expected $1.31 billion from $1.0 billion in the year-ago period. Total same-store sales increased 14.3%, also more than expected, driven by 8.7% transaction growth and 5.6% growth in average ticket.

Online, the brand was on fire. E-commerce sales skyrocketed 70.9% to $104.3 million from $61.0 million last year. Ulta said it now expects to grow e-commerce sales in the 50% range, compared to its previous guidance of 40%, in its current fiscal year.

"The Ulta Beauty team kicked off 2017 with excellent performance in the first quarter,” said Mary Dillon, CEO, Ulta, which ended the quarter with 990 stores. “Strong execution of our growth strategies delivered above plan sales and earnings growth. Our results reflect continued newness and innovation in merchandising, successful marketing programs, steady progress in our salon business and exceptional growth in e-commerce.”

For fiscal 2017, the company expects now comparable sales growth of approximately 9% to 11%, including the impact of the e-commerce business, compared to previous guidance of 8% to 10%. It estimates earnings per share growth in the mid-twenties percent range, compared to previous guidance of low twenties percent range.