Ulta Beauty's turnaround program is starting to yield results. The retailer reported that Q3 2024 net sales increased 1.7% to $2.53 billion compared to $2.49 billion the year prior.
Notably, Q3 results were driven by new stores; sales for stores open at least 14 months and e-commerce sales increased just 0.6%, versus 4.5% in the prior year.
Top performers included fragrance and body skin care, while hair care, makeup and overall skin care remained challenged.
Fragrance Booms for Ulta
"Fragrance was our strongest category, delivering high single-digit comp growth, driven by men's fragrance, gender-neutral fragrances, and new products, including new fall and holiday gift sets," said Dave Kimbell, chief executive officer, during an analyst call.
Men's fragrance results were boosted by Armani and YSL, as well as Jean Paul Gaultier and Valentino.
Gender-neutral scents were also a highlight, per the CEO, is increasing, driven by Billie Eilish and Noyz.
Women's fragrance results were led by newness from exclusives like Kylie Jenner and Orebella, as well as Valentino, YSL and Nest.
Body Leads Skin Care
Body skin care sales grew in the mid-single-digits for Ulta in Q3, led by body skin care. Sol de Janeiro was a particular standout, reflecting ongoing strength for the brand.
That said, prestige skin care declined somewhat, while mass skin care was flat.
Makeup Remains Challenged
Overall makeup category sales fell in the low single digit range, per Ulta, with the mass sector leading declines and a flat prestige sector.
Strength was seen in the relaunched Ulta Beauty Collection, as well as newness from Charlotte Tilbury, Eliot Beauty and DIBS Beauty.
MAC and Clinique also performed well in the quarter.
Meanwhile, hair sales fell in the low single digits. That said, top performers included Matrix, Ouai, Divi, Odele and Redken.
Kimbell added, "In hair tools, new products from Shark Beauty and Dyson resonated with guests. This growth was offset by softness in key brands with expanded distribution and limited newness this year."
Ulta Beauty's Q3 and 9-month Results
Q3 comparable store sales were led by a 0.5% increase in transactions and a 0.1% increase in average ticket.
Net sales for the first nine months of 2024 increased 2% to $7.8 billion, compared to $7.7 billion in the same period of 2023.
Again, new stores led growth, with comparable sales only rising 0.3%.
Based on these results, Ulta Beauty is slightly increasing the lower end of full-year net sales from a range of $11-11.2 billion to $11.1-11.2 billion.
“The Ulta Beauty team delivered better-than-expected sales and profitability reflecting improved sales trends and strong financial discipline," says Dave Kimbell, chief executive officer. "I am proud of the progress we’ve made and encouraged by early signs that our efforts to reinforce our market position and drive improved performance are gaining traction. As we look to the remainder of fiscal 2024, we are focused on executing with excellence across our key initiatives to deliver in a dynamic environment. We remain confident that our model and strategies will drive long-term profitable growth and share leadership by enhancing our position as the destination for beauty enthusiasts for a lifetime.”
