Beauty retailer Ulta demonstrated the resiliency of its category with first-quarter results that saw sales rise 23.7% compared to year-ago totals.
Ulta's same-store sales grew 15.2%, e-commerce sales increased 38.8% to $61.0 million and its loyalty program soared to 19.4 million members, up 25%.
Ulta easily sailed past analyst forecasts for the quarter: Earnings rose 39% to $1.45 per share, on a revenue boost of 24% to $1.07 billion, compared to expectations of $1.29 per share on expected revenue of $1.03 billion. That 15.2% jump in same-store sales, up from 12.5% in Q4, handily beat expectations for a 10.7% increase.
Ulta CEO Mary Dillon said she believes that the beauty sector is in something of a shelter from the retail storm, enjoying high consumer demand and offering compelling reasons to go into stores, including the opportunities for customer service in salons and the ability to sample merchandise. That’s helping Ulta and rival Sephora shrug off competition from Amazon, too.
Like Sephora, Ulta sells beauty products in more accessible store setups compared to the traditional department store approach. But Ulta's lower-cost makeup and beauty products bring in teens and others with less money to spend.
“We are off to a phenomenal start to the year, delivering excellent top and bottom line growth in the first quarter,” Dillon said in a statement. “Several positive factors are coming together to drive the momentum in our business, exemplified by the best comparable sales growth in our history as a public company. These include healthy consumer demand in the beauty category, our unique format and offering which are supporting sustained share gains, and effective collaboration across the enterprise to ensure strong execution of our growth strategies.”
Ulta accordingly raised its fiscal-year guidance, saying it expects to achieve same-store sales growth (including e-commerce) of 10% to 12%, up from its previous guidance of 8% to 10%. The company also plans to increase total sales in the “high-teens percentage range,” from previous guidance of mid- to high-teens percentage range, and anticipates e-commerce sales growth in the 40% range. Ulta will expand its store footprint by 11% with the opening of 100 net new stores and the remodeling of 12.
Executives also told analysts on a Thursday conference call that with just 3% of U.S. market share, there’s still more room to grow, especially with the aid of its surging rewards program, which sent more than 80% of sales its way, according to Investors Business Daily. Ulta shares leapt 8% in late trading.