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Is Ulta Beauty Going to Double Its Market Share?

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Ulta had a brave marketing strategy in the United States, creating three unique shopping environments for mass, prestige and salon.

Ulta believes that it will double its market share in the next few years, in part by expanding stores (by 1,400 to 1,700), boosting e-commerce to a $1 billion business and boosting store productivity.

Ulta Beauty expects comparable sales to grow by as much as 9% between 2017 and 2019, compared to the previous forecast of 5% to 7%. The news shouldn't be a surprise, despite the fact that so many retailers are closing doors and scaling down.

CEO Mary Dillon recently detailed the company's strategy at a CEW event.

Ulta Beauty says it will grow by leveraging its "beauty enthusiasts," which comprise 77% of beauty market spending.

In 2016, Ulta brought on board brands such as co-washing leaders Unwash, crowdsourced beauty innovator Julep and acne care giant proactiv. Now, Ulta Beauty has raised its financial guidance for the third quarter, with comparable sales, including e-commerce, rising as much as 15%, while full-year 2016 comparable sales are expected to increase between 12% and14%, compared to the original forecast of 11% to 13%.

The company is also confirming its outlook for the business to deliver earnings per share growth in the low twenties percentage range for fiscal 2017, 2018 and 2019.

Ulta Beauty says it will grow by leveraging its "beauty enthusiasts," which comprise 77% of beauty market spending, growing share of wallet via its loyalty program, which accounts for 90% of company sales but only one third of customers, as well as new brand launches, which have included Origins, Dior, Estee Lauder, Shiseido, Stash SJP fragrance, Honest Beauty and Dyson hair dryers.

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