Ulta Beauty posts upbeat earnings

BOLINGBROOK, Ill. — Ulta Beauty said net sales climbed 8.9% to $3 billion in its second quarter. Comparable-store sales increased 3.8%, easily outdistancing analysts’ forecast for a 2.3% rise.

Second-quarter profit was $282 million, or $6.55 a share, compared with $260.9 million, or $5.78 a share, a year earlier. Analysts were expecting earnings of $6.20 a share.

Factors cited by Ulta for the improvements include the addition of 13 net new stores in the United States and contributions from Space NK, its London-based subsidiary renowned for popularizing curated beauty collections of niche brands sold through its chain of gallery-style stores in the U.K. and Ireland. 

“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,” said Kecia Steelman, Ulta Beauty’s president and chief executive officer.

Steelman said demand for prestige beauty products was strong in the second quarter. Nearly half of its sales are coming from exclusive brands and products in its assortment.

Ulta raised its full-year earnings forecast, betting that its spending on marketing and product assortment will continue to draw shoppers to its stores and digital storefronts. The company also plans to sustain the recent pace of investment in new stores, remodels, and information technology.

Management now expects per-share earnings of between $28.70 and $29, compared with the earlier forecast of $28.36 to $28.80. Ulta sees revenue growing between 6.7% and 7.2% for the full year.

"Ulta's strong quarter is a testament to the work the company has done to establish itself as shoppers' preferred beauty retailer, despite growing competition from the likes of Amazon and TikTok," eMarketer analyst Rachel Wolff said.

Ulta, the largest specialty beauty retailer in the U.S., operates more than 1,500 stores and sells cosmetics, fragrance, skin care, hair care, and wellness products, the company said. The company also offers salon services and runs the Ulta Beauty Rewards loyalty program. Ulta is expanding internationally through a joint venture in Mexico, a franchise in the Middle East, and Space NK in the United Kingdom and Ireland.