Net Sales Increased 18.6%
Comparable Sales Increased 10.3%
Diluted EPS Increased 21.4% to $1.70
Ulta Beauty, Inc. (NASDAQ:ULTA) today announced financial results for the thirteen week period (“Third Quarter”) and thirty-nine week period (“First Nine Months”) ended October 28, 2017, which compares to the same periods ended October 29, 2016.
“Our third quarter results clearly demonstrate the strength and distinct advantages of the Ulta Beauty business model,” said Mary Dillon, Chief Executive Officer. “We delivered double digit comparable sales growth, in spite of a moderation in the growth rate of our largest category – makeup – and meaningful disruption from hurricanes. We flexed our merchandising and marketing plans, leveraged our consumer insights and CRM platform, and worked with our brand partners to create compelling offers for our guests. We also benefitted from the unmatched breadth of beauty categories and products we offer. These levers allowed us to drive significant share gains, continue to rapidly grow our base of loyalty members, and thrive amidst shifting category trends within the beauty industry.”
For the Third Quarter
• Net sales increased 18.6% to $1,342.2 million from $1,131.2 million in the third quarter of fiscal 2016. The Company estimates that Hurricanes Harvey and Irma resulted in approximately $14 million in lost sales;
• Comparable sales (sales for stores open at least 14 months and e-commerce sales) increased 10.3% compared to an increase of 16.7% in the third quarter of fiscal 2016. The 10.3% comparable sales increase was driven by 6.0% transaction growth and 4.3% growth in average ticket. The Company estimates that Hurricanes Harvey and Irma resulted in approximately 100 basis points of negative impact to comparable stores sales in the third quarter of fiscal 2017;
• Retail comparable sales increased 6.6%, including salon comparable sales growth of 3.8%;
• Salon sales increased 10.8% to $66.9 million from $60.4 million in the third quarter of fiscal 2016;
• E-commerce sales grew 62.9% to $119.8 million from $73.6 million in the third quarter of fiscal 2016, representing 370 basis points of the total company comparable sales increase of 10.3%;
• Gross profit as a percentage of net sales decreased 110 basis points to 36.7% from 37.8% in the third quarter of fiscal 2016, due to deleverage in merchandise margins;
• Selling, general and administrative (SG&A) expenses as a percentage of net sales decreased 90 basis points to 23.9%, compared to 24.8% in the third quarter of fiscal 2016, due to leverage in corporate overhead and variable store expenses attributed to cost efficiencies and higher sales volume, partially offset by investments in store labor to support our growth initiatives and charges related to the hurricanes;
• Pre-opening expenses increased to $9.7 million, compared to $6.9 million in the third quarter of fiscal 2016. Real estate activity in the third quarter of fiscal 2017 included 48 new stores, two relocations and five remodels compared to 42 new stores, one relocation and six remodels in the third quarter of fiscal 2016;
• Operating income increased 16.5% to $162.7 million, or 12.1% of net sales, compared to $139.7 million, or 12.4% of net sales, in the third quarter of fiscal 2016;
• Tax rate decreased to 35.8% compared to 37.4% in the third quarter of fiscal 2016. The decrease was primarily due to the adoption of a new accounting standard at the beginning of this fiscal year for employee share-based payments, and income tax credits;
• Net income increased 19.5% to $104.6 million compared to $87.6 million in the third quarter of fiscal 2016; and
• Income per diluted share increased 21.4% to $1.70, including a benefit of $0.04 due to a lower tax rate, a benefit of $0.03 due to a lower share count, offset by approximately $0.08 due to the impact of Hurricanes Harvey and Irma in the quarter, compared to $1.40 in the third quarter of fiscal 2016.
For the First Nine Months
• Net sales increased 20.5% to $3,946.9 million from $3,274.2 million in the first nine months of fiscal 2016;
• Comparable sales increased 12.1% compared to an increase of 15.4% in the first nine months of fiscal 2016. The 12.1% comparable sales increase was driven by 6.9% transaction growth and 5.2% growth in average ticket;
• Retail comparable sales increased 8.6%, including salon comparable sales growth of 7.1%;
• Salon sales increased 14.3% to $203.7 million from $178.2 million in the first nine months of fiscal 2016;
• E-commerce comparable sales grew 68.2% to $320.4 million from $190.5 million in the first nine months of fiscal 2016, representing 350 basis points of the total company comparable sales increase of 12.1%;
• Gross profit as a percentage of net sales decreased 30 basis points to 36.4% from 36.7% in the first nine months of fiscal 2016;
• SG&A expenses as a percentage of net sales decreased 60 basis points to 22.5% compared to 23.1% in the first nine months of fiscal 2016, due to leverage in corporate overhead and variable store expenses attributed to cost efficiencies and higher sales volume, partially offset by investments in store labor to support our growth initiatives;
• Pre-opening expenses increased to $20.0 million, compared to $14.2 million in the first nine months of 2016. Real estate activity in the first nine months of 2017 included 86 new stores, five relocations and 10 remodels compared to 79 new stores, two relocations and 11 remodels in the first nine months of fiscal 2016;
• Operating income increased 23.3% to $530.9 million, or 13.5% of net sales, compared to $430.6 million, or 13.2% of net sales, in the first nine months of fiscal 2016;
• Tax rate decreased to 34.8% compared to 37.5% in the first nine months of fiscal 2016. The decrease was primarily due to the adoption of a new accounting standard at the beginning of this fiscal year for employee shared-based payments;
• Net income increased 28.8% to $347.1 million compared to $269.5 million in the first nine months of fiscal 2016; and
• Income per diluted share increased 30.4% to $5.58, including a benefit of $0.20 due to a lower tax rate, a benefit of $0.07 due to a lower share count, offset by approximately $0.08 due to the impact of Hurricanes Harvey and Irma, compared to $4.28 in the first nine months of fiscal 2016.
more detail at: http://ir.ultabeauty.com/news-releases/news-release-details/2017/Ulta-Beauty-Announces-Third-Quarter-2017-Results/default.aspx