Ulta Beauty Q1 sales shine

Published: 18-Jun-2014

The retailer reported a 22.5% increase in net sales for Q1 2014

US beauty retailer Ulta Beauty has reported a 22.5% increase in net sales for the first quarter of 2014, reaching US$713.8m compared to $582.7m in the first quarter of fiscal 2013. Net income rose 19.4% to $50m.

Comparable store sales – ie sales for stores open at least 14 months and e-commerce sales – rose 8.7%, compared to an increase of 6.7% in the first quarter of fiscal 2013. The company opened 21 stores in the first quarter, bringing its total up to 696 outlets and a square footage of 7,375,270, which is 20% more than it had in Q1 2013.

Shining most brightly were e-commerce sales, which shot up 72.3% year on year.

Despite the glowing results, gross profit fell 50 basis points to 34.5%, which the company said was primarily driven by product and channel mix shifts, converting loyalty programme members to the ULTAmate Rewards programme and the deleveraging of fixed store costs as a result of the large number of new stores.

For the second quarter, the company expects the growth to continue, with net sales of around $706m-$717m, compared to actual net sales of $601m in the first quarter of 2013, and an increase in comparable store sales of 5%-7%.

CEO Mary Dillon said: “Ulta Beauty delivered strong sales and earnings growth in the first quarter. The team’s accomplishments included improving retail transactions which turned positive, driving continued momentum in our online business, successfully rolling out new brands, completing a smooth conversion of our loyalty programme members onto one platform and managing inventory very well.”

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