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Ulta shares rise after magnificence retailer posts 60% achieve in income as make-up gross sales get better

Florida, Port St Lucie, The Touchdown at Custom, out of doors mall, Ulta, magnificence cosmetics retailer.

Jeff Greenberg | Common Photos Group | Getty Photos

Ulta Magnificence shares rose greater than 5% in prolonged buying and selling on Wednesday after the corporate reported fiscal second-quarter gross sales jumped greater than 60% as buyers rushed in to restock their make-up luggage.

Ulta raised its full-year outlook after seeing the return of buyer demand for magnificence merchandise at a sooner tempo than anticipated.

“This efficiency displays the restoration of the wonder class, investments and selections we have made over the past yr to adapt to the market disruption and strengthen our management place, and the continued efforts of our associates to ship nice experiences for our friends,” mentioned CEO Dave Kimbell.

In buying and selling earlier Wednesday, its inventory hit a 52-week excessive of $390.68.

Here is how the corporate did for its second quarter ended July 31 in contrast with what analysts surveyed by Refinitiv have been anticipating:

  • Earnings per share: $4.56 vs. $2.59 anticipated
  • Income: $1.97 billion vs. $1.76 billion anticipated

Web earnings rose to $250.9 billion, or $4.56 per share, from $8.1 billion, or 14 cents per share, a yr earlier.

Income jumped to $1.97 billion from $1.2 billion a yr in the past.

Analysts surveyed by Refinitiv had anticipated the corporate to earn $2.59 per share on income of $1.76 billion.

The income beat was pushed by a 52.5% enhance in transactions and a 26.7% enhance in how a lot clients spent on common.

The corporate’s same-store gross sales grew 56.3% within the quarter. Final yr, gross sales at shops open not less than 14 months fell 26.7% because of the pandemic. Identical-store gross sales within the quarter have been 13.1% larger than 2019 ranges.

“The resurgence of visitors in shops drove the sturdy comp efficiency,” Ulta CFO Scott Settersten mentioned on the corporate’s convention name.

Whereas retailer visitors through the quarter was larger than that of the primary quarter, it nonetheless lagged behind 2019 ranges. Ulta opened seven new shops through the quarter and closed one retailer, and plans to open 44 internet new shops this yr. Beforehand, the corporate anticipated to open 40 internet new shops this yr.

Energetic customers in its buyer loyalty program rose to 34.6 million, in keeping with Kimbell.

As anticipated, e-commerce gross sales fell from a yr in the past, as coronavirus restrictions eased and vaccinated clients grew to become extra snug procuring in individual. On a two-year foundation, on-line gross sales through the interval greater than doubled.

As retailers proceed to expertise provide chain delays, Ulta is assured stock ranges on the finish of the third quarter can be larger than its anticipated gross sales development.

Executives mentioned most of its merchandise are made within the U.S. and Europe, however there may be some restricted publicity to delays popping out of China.

“Like others, we’re managing international provide chain constraints, port congestion and different headwinds, together with the resurgence of Covid-19,” Settersten mentioned. “Our groups are working diligently to mitigate dangers, and when applicable we’re proactively working with our manufacturers to prioritize receipts to make sure we’ve got an sufficient stock for the vacation season.”

Ulta estimates gross sales this yr will vary between $8.1 billion and $8.Three billion. Beforehand, it anticipated $7.7 billion to $7.Eight billion in gross sales. Identical-store gross sales will rise 30% to 32%, it mentioned, larger than its prior outlook of 23% to 25% development.

Earnings are forecast to be round $14.50 to $14.70 per share for the yr, in contrast with a previous vary of $11.50 to $11.95 per share.

Ulta inventory is up almost 36% yr thus far placing its market cap at almost $21.Four billion.

Learn the total launch from Ulta Magnificence right here.

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