Ulta Beauty announced financial results for the thirteen-week period (second quarter) and twenty-six-week period (first six months) ended August 3, 2013, which compares to the same periods ended July 28, 2012.
“The Ulta Beauty team delivered a very strong quarter while moving our growth strategy forward,” stated Mary Dillon, CEO. “Ulta Beauty added several new brands to its stores; we further expanded the number of Clinique and Lancôme boutiques; we drove rapid growth in our e-commerce business; and we achieved record membership in our loyalty program. I am incredibly excited about the future potential of Ulta Beauty, and I look forward to working with the team to build on the solid foundation they have built.”
For the second quarter, net sales increased 24.8% to $601 million, from $481.7 million in the second quarter of fiscal 2012; comparable store sales (sales for stores open at least 14 months) increased 8.4% compared to an increase of 9.7% in the second quarter of fiscal 2012, including the impact of e-commerce sales; operating income increased 26.8% to $72.9 million, or 12.1% of net sales, compared to $57.5 million, or 11.9% of net sales, in the second quarter of fiscal 2012; and net income increased 28.3% to $44.9 million compared to $35.0 million in the second quarter of fiscal 2012. The company added 39 Clinique boutiques to end the second quarter with 90 stores featuring Clinique, and expects to add 10 more Clinique boutiques during fiscal 2013. Five Lancôme boutiques were added, bringing the total number of stores offering Lancôme products to 85, with 20 additional boutiques underway.
Also, the company continued to add new products and brands, including the recent launches of IT Cosmetics, Jane Cosmetics, Mally Girl and Meaningful Beauty. Ulta's loyalty program membership grew to 12 million active members, an increase of 19% compared to the second quarter of fiscal 2012, and Ulta.com achieved sales growth of 72%, representing 130 basis points of the total company same store sales increase of 8.4%.
For the first six months, net sales increased 23.8% to $1.183 billion from $955.8 million in the first six months of fiscal 2012; comparable store sales (sales for stores open at least 14 months) increased 7.6% compared to an increase of 10.1% in the first six months of fiscal 2012, including the impact of e-commerce sales; operating income increased 22.3% to $140.6 million, or 11.9% of net sales, compared to $114.9 million, or 12% of net sales, in the first six months of fiscal 2012; and net income increased 24.1% to $86.7 million compared to $69.9 million in the first six months of fiscal 2012.
During the second quarter, the company opened 33 stores located in California, Michigan, Montana, Ohio, Illinois, Tennessee, Florida, Massachusetts, West Virginia, Virginia, Georgia, North Carolina, Kentucky, Pennsylvania, South Carolina, Missouri, Idaho, Oregon and New Jersey, and relocated one store in Sacramento. The company ended the second quarter with 609 stores and square footage of 6,476,445, which represents a 25% increase in square footage compared to the second quarter of fiscal 2012.
For the third quarter of fiscal 2013, Ulta currently expects net sales in the range of $613–623 million, compared to actual net sales of $505.6 million in the third quarter of fiscal 2012. Comparable store sales for the third quarter of 2013 are expected to increase 5–7%. The company reported a comparable store sales increase of 8.4% in the third quarter of 2012. Income per diluted share for the third quarter of fiscal 2013 is estimated to be in the range of $0.71–0.74. This compares to income per diluted share for the third quarter of fiscal 2012 of $0.59. Ulta also is confirming its previously announced fiscal 2013 earnings guidance. The company plans to achieve comparable store sales growth of approximately 5% to 7%, including the impact of the e-commerce business; expand square footage by 22% with the opening of 125 net new stores; remodel 7 locations; and deliver earnings per share growth, on a 52-week adjusted basis, at the low end of the company’s long-term target of 25&nash;30%, including the impact of approximately $0.13 of income per diluted share in incremental investments associated with the planned new store program, supply chain, warehouse systems, and e-commerce site investments, the expansion of prestige brand boutiques, and investments in store labor to support rapid growth in the prestige cosmetics and skincare categories.