Ulta Shows Strength in Q1 2012

Ulta Beauty announced financial results for the thirteen-week period, its 2012 first quarter, ended April 28, 2012, which compares to the same period ended April 30, 2011.

For the 2012 first quarter, the company’s net sales increased 22.8% to $474.1 million from $386 million in the first quarter of fiscal 2011; comparable store sales) increased 10.1% compared to an increase of 11.1% in the first quarter of fiscal 2011; operating income increased 47.1% to $57.4 million, or 12.1% of net sales, compared to $39.1 million, or 10.1% of net sales, in the first quarter of fiscal 2011; net income increased 49.7% to $34.9 million compared to $23.3 million in the first quarter of fiscal 2011; and income per diluted share increased 45.9% to $0.54 compared to $0.37 in the first quarter of fiscal 2011.

Ulta president and CEO Chuck Rubin stated, “2012 is off to a great start. Our team delivered another quarter of excellent financial performance by continuing to execute on our five-point strategy of accelerating store growth, introducing our guests to new brands, products, and services, enhancing our loyalty program, broadening our marketing reach, and increasing our focus on Ulta.com.

“In the first quarter we grew net sales by 23%, driven by strong new store performance and double digit same store sales. Combining our growth initiatives with our operating margin expansion strategies, we grew earnings per share at twice the rate of sales, with earnings per share increasing 46%. Looking ahead, we remain confident in achieving our long-term targets for sales and earnings growth as we continue to provide a unique offering and a customer experience that are fueling steady market share gains.

“Also, we are pleased to announce that we have completed an analysis of the long-term potential in the U.S. for our 10,000-square foot store model and have increased our store plan by 20% to 1,200 stores, compared to our previous estimate of 1,000 stores. Finally, we will be adding new Lancôme boutiques to approximately 50 additional stores prior to this holiday selling season. This will bring our total Lancôme boutique count to about 79. We also will be making additional investments in selected stores to improve our prestige offering and accommodate the future addition of other prestige brand boutiques. We believe both of these efforts will be exciting for our guests and reinforce Ulta’s positioning as the beauty authority,” Rubin concluded.

During the quarter, the company opened 18 new stores, ended the first quarter of 2012 with 467 stores and square footage of 4,949,854, which represents a 19% increase in square footage compared to the first quarter of fiscal 2011.

For the second quarter of fiscal 2012, Ulta currently expects net sales in the range of $466--473 million, compared to actual net sales of $394.6 million in the second quarter of fiscal 2011. This assumes comparable stores sales increase 6% to 8%, compared to an 11.3% increase last year, which would result in a two-year comparable store sales increase of 17.3% to 19.3%.

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