Ulta Posts 22.9% Sales Increase for Q1 2013

Ulta Beauty announced financial results for the thirteen-week period ended May 4, 2013 (first quarter 2013), which compares to the same period ended April 28, 2012. Net sales increased 22.9% to $582.7 million from $474.1 million in the first quarter of fiscal 2012, and comparable store sales (sales for stores open at least 14 months) increased 6.7% including the impact of e-commerce sales, compared to an increase of 10.1% in the first quarter of fiscal 2012. Operating income increased 17.8% to $67.7 million, or 11.6% of net sales, compared to $57.4 million, or 12.1% of net sales, in the first quarter of fiscal 2012, and net income increased 20% to $41.8 million compared to $34.9 million in the first quarter of fiscal 2012.

Dennis Eck, interim Ulta CEO, stated, “We are pleased to announce a strong start to fiscal 2013, with better than expected sales and margin performance. We are on track to add 125 stores this year, and continue to drive outstanding new store productivity. We opened Clinique boutiques in eight more stores, ending the quarter with 51 stores offering Clinique products, with further expansion planned for the rest of the year. We are delighted to announce the addition of 25 Lancôme boutiques planned for the fall of 2013, and expect to end the year with a significant percentage of our stores featuring one of these iconic brand boutiques. We continue to grow our loyalty programs and enhance our ability to communicate with our customers with our CRM platform, and plan to convert all our loyalty program members to one program, ULTAmate Rewards, in early 2014. Ulta.com delivered 70% sales growth during the quarter, and we are looking forward to launching our redesigned e-commerce platform this fall. The team is executing our growth strategies very well, and our outlook for continued market share gains is excellent.”

During the first quarter, the Company opened 28 stores located in Ann Arbor, MI; Branson, MO; Carmel, IN; Carson City, NV; Charlotte, NC; Clifton, NJ; Clovis, CA; Columbia, SC; Decatur, AL; East Peoria, IL; Eau Claire, WI; Everett, WA; Gambrills, MD; Hanford, CA; Heath, OH; Holly Springs, NC; Jacksonville, FL; Madison, WI; Nashua, NH; Richmond, TX; Salisbury, MD; Santa Fe, NM; Sioux Falls, SD; Southern Pines, NC; Springfield, MO; Tallahassee, FL; Williamsburg, VA and Woodbridge, VA. In addition, the company closed two stores; thus, the company ended the first quarter with 576 stores and square footage of 6,121,399, which represents a 24% increase in square footage compared to the first quarter of fiscal 2012.

For the second quarter of fiscal 2013, Ulta currently expects net sales in the range of $579–589 million, compared to actual net sales of $481.7 million in the second quarter of fiscal 2012. Comparable store sales for the second quarter of 2013 are expected to increase 4–6%. The company reported a comparable store sales increase of 9.3% in the second quarter of 2012.

Ulta also is confirming its previously announced fiscal 2013 guidance. The company plans to achieve comparable store sales growth of approximately 4–6%, including the impact of the e-commerce business; expand square footage by 22% with the opening of 125 net new stores; remodel seven 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 25–30%.

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