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A Closer Look At Ulta's Sales Boom

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Ulta's new credit card will boost store visits and shopper loyalty.

As author Jeffrey Ten noted earlier this year, "Ulta has one of the most unique product mixes in the retail cosmetic industry, featuring mass, prestige and professional brands. As a result, the retailer can reach a much wider audience than Sephora, and it is extremely successful in the bedroom communities in the United States."

Ulta Beauty, which recently brought on new products from Honest Beauty and crowdsource mecca Julep, and which added its own credit card to the mix, has announced that second quarter sales increased 21.9% to $1,069.2 million (2015: $877.0 million); comparable sales increased 14.4%, driven by 9.7% growth in transactions and 4.7% growth in average ticket.

Retail comparable sales increased 12.6%, including salon comparable sales growth of 8.0%; salon sales increased 14.3% to $59.0 million.

“Our second quarter results reflect a strong pipeline of newness and innovation..."

E-commerce sales grew 54.9% to $55.9 million from $36.1 million in the second quarter of fiscal 2015.

For the first half of the year, net sales increased 22.8% to $2,142.9 million, from $1,745.1 million in the first six months of fiscal 2015; comparable sales increased 14.8% compared to an increase of 10.8% in the first six months of fiscal 2015.

Retail comparable sales increased 13.3%, including salon comparable sales growth of 7.9%; salon sales increased 14.5% to $117.9 million from $102.9 million in the first six months of fiscal 2015.

E-commerce comparable sales grew 46.0% to $116.9 million from $80.1 million in the first six months of fiscal 2015. During this period, Ulta opened 37 new stores.

Looking ahead, Ulta expects to incur capital expenditures of about $390 million, compared to $299 million in fiscal 2015, reflecting the roll-out of prestige brand boutiques and enhancements to the Ulta Beauty Collection and fragrance fixtures.

"The Ulta Beauty team achieved another quarter of excellent top and bottom line performance, while making significant progress on many elements of our growth strategy,” said Mary Dillon, Chief Executive Officer. “Our second quarter results reflect a strong pipeline of newness and innovation in merchandising, progress in growing our brand awareness, major milestones related to our loyalty program, continued rapid growth in our e-commerce business, and successful execution of our supply chain investments.”

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