Beauty is resilient. Ulta Beauty has reported Q3 2022 net sales of $2,338.8 million, a roughly 17.2% gain from 2021's $1,995.8 million. Nine-month 2022 net sales totaled $6,981.8 million, an 18.3% gain compared to 2021's $5,901.5 million.
Meanwhile, the beauty retailer has boosted its full-year forecast to a range of $9.95-10.00 billion, compared to the previous estimate of $9.65-9.75 billion.
Ulta's Results by Category
"All major categories exceeded our expectations, and we increased our market share in prestige beauty versus the fiscal third quarter last year based on dollar sales according to point-of-sale data from the NPD Group," said Dave Kimbell, chief executive officer, during an analyst call.
Per the executive, skin care, fragrance and bath, hair care, and makeup grew in the double-digits year-over-year.
Kimbell added, "From a segment perspective, we saw double-digit sales growth across both prestige and mass, with mass generally outperforming prestige."
Skin care is the fastest-growing segment for Ulta, driven by curated highlights such as Skincare We All Love in stores, as well as new and established brand partners such as Drunk Elephant, Supergoop!, Good Molecules, The Ordinary, Hero Cosmetics and La Roche-Posay.
Gen Z powered fragrance results, with key performers including the Ulta Beauty exclusive Billie Eilish as well as Burberry, Gucci, Viktor&Rolf, Versace and Jimmy Choo. Holiday fragrance gift sets, which were launched early this year, also performed well.
Hair care is Ulta's second largest category, driven by hair health, damage repair and targeted treatments. Key performing brands include Ouai and Briogeo in prestige, and masstige brands such as Eva NYC, Batiste and Kristin Ess, as well as professional brands such as Pureology, Redken and Kenra.
Hair tools performed more weakly.
Key color cosmetic growth areas included foundation, concealers, blush and lip, driven by new brand partners like Fenty, r.e.m. beauty and Numero de Chanel, as well as new brands such as Clinique, e.l.f. and Nyx. Wider distribution of MAC, Chanel Beaute and Bobbi Brown expanded into more stores.
Ulta has also expanded wellness assortments, BIPOC-led brands and conscious beauty.
Breaking Down Q3 and Nine-month Results
Q3 comparable sales (sales for stores open at least 14 months and e-commerce sales) increased 14.6% compared to an increase of 25.8% in the third quarter of fiscal 2021, driven by a 10.7% increase in transactions and a 3.5% increase in average ticket.
Nine-month comparable sales increased 15.6% compared to an increase of 47.1% in the first nine months of fiscal 2021, driven by a 9.7% increase in transactions and a 5.4% increase in average ticket.
Key drivers for Q3 and nine-month results included COVID restriction reductions, retail price increases, and the addition of new brands and product innovation.
“Amidst a challenging macro environment, the Ulta Beauty team delivered yet another outstanding quarter, with strong top and bottom-line results and growth across all major categories and channels,” said Kimbell. “Our third quarter results reflect the sustained resilience of the beauty category and the strong emotional connection and loyalty we have cultivated with our guests. I am confident our business model, which offers unmatched breadth, value, and convenience, is even more relevant today and unlocks opportunities to further delight guests as we continue to lead the beauty category.”