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Ulta Q2 Net Sales Up 22%, Net Income Up 46%
Posted: September 7, 2012
Ulta Beauty announced financial results for the 13-week period (second quarter) and 26-week period (first six months) ended July 28, 2012, which compares to the same periods ended July 30, 2011.
For the second quarter, net sales increased 22.1% to $481.7 million from $394.6 million in the second quarter of fiscal 2011, and comparable store sales (sales for stores open at least 14 months) increased 9.3% compared to an increase of 11.3% in the second quarter of fiscal 2011. Operating income increased 44.9% to $57.5 million, or 11.9% of net sales, compared to $39.7 million, or 10.1% of net sales, in the second quarter of fiscal 2011, net income increased 46.4% to $35 million compared to $23.9 million in the second quarter of fiscal 2011; and income per diluted share increased 42.1% to $0.54 compared to $0.38 in the second quarter of fiscal 2011.
Chuck Rubin, president and CEO of Ulta stated, “We are very pleased to report excellent results for the second quarter. The team drove strong sales and profit growth by continuing to focus on the five components of our multi-year growth strategy: accelerating store growth, introducing new products, services and brands, enhancing our loyalty program, broadening our marketing reach and increasing our digital focus with Ulta.com. Second quarter highlights include strong new store productivity and solid execution of our accelerated new store program. Our rich pipeline of new products and brands continues to drive traffic and market share gains. We are pleased with our progress with the roll out of the 50 additional Lancôme boutiques we announced last quarter. We are also excited to announce the addition of Clinique boutiques in 35 additional stores in light of the success of the 13 stores currently offering Clinique. Our loyalty program reached the milestone of 10 million active customers with 50% of the stores now on the new points program. All of these strategies combined to drive gains in market share and awareness and continued to position Ulta as the beauty authority. Most importantly, our 15,000 associates are creating a fun, inviting environment to make Ulta the place where guests are increasingly choosing to shop.”
For the first six months, the company’s net sales increased 22.4% to $955.8 million from $780.6 million in the first six months of fiscal 2011, and comparable store sales increased 9.7% compared to an increase of 11.2% in the first six months of fiscal 2011. Operating income increased 46% to $114.9 million, or 12% of net sales, compared to $78.7 million, or 10.1% of net sales, in the first six months of fiscal 2011, net income increased 48% to $69.9 million compared to $47.2 million in the first six months of fiscal 2011; and income per diluted share increased 45.3% to $1.09 compared to $0.75 in the first six months of fiscal 2011.
During the second quarter, the company also opened 22 new store locations and ended the second quarter with 489 stores and square footage of 5,188,128, which represents an 18% increase in square footage compared to the second quarter of fiscal 2011.
For the third quarter of fiscal 2012, Ulta currently expects net sales in the range of $494–503 million, compared to actual net sales of $413.1 million in the third quarter of fiscal 2011. This assumes comparable stores sales increase 6–8%, compared to a 9.6% increase last year. Income per diluted share for the third quarter of fiscal 2012 is estimated to be in the range of $0.54–0.56. This compares to income per diluted share for the third quarter of fiscal 2011 of $0.42.
For fiscal 2012, Ulta plans to achieve comparable store sales growth of approximately 8%, approximately 300 basis points above the high end of the company’s long-term comparable store sales growth goal of 3% to 5%; deliver earnings per share in the range of $2.58 to $2.60, expand square footage by approximately 22% with the opening of approximately 100 new stores; remodel approximately 21 locations; and generate free cash flow.