Key Takeaways
- Ulta Beauty exceeded first-quarter estimates for earnings and revenue, and executives gave positive comments about future growth.
- The beauty products retailer said comparable store sales were up 1.6% in the quarter.
- CEO Dave Kimbell and CFO Paula Oyibo explained that Ulta Beauty was on a path of improvement.
Ulta Beauty (ULTA) shares gained Friday, a day after the beauty products retailer posted better-than-expected first-quarter results and said it was optimistic about future growth.
The company reported a quarterly profit of $6.47 per share, well ahead of the $6.18-per-share consensus estimate of analysts compiled by Visible Alpha. Revenue increased 3.5% year-over-year to $2.73 billion, slightly higher than forecasts.
Ulta Beauty explained that the revenue gain was driven by a 1.6% advance in comparable store sales, the contribution of new stores, and growth in other revenue. It noted comparable store sales were boosted by a 1.3% jump in transactions and a 0.3% rise in average ticket.
Ulta CEO Says ‘Clear Plan to Accelerate Our Momentum’
Chief Executive Officer (CEO) Dave Kimbell said the retailer faced a “dynamic operating environment,” but added that Ulta Beauty has a “clear plan to accelerate our momentum.”
CFO Paula Oyibo pointed out in the conference call that while the company anticipates comparable store sales to climb in the low-single-digit percent range in the first half of the year, it sees an acceleration in the second half of between 2% and 4%, which she said reflected “the impact of our sales-driving initiatives, our newness pipeline, and decelerating growth in the second half of last year.”
Shares of Ulta Beauty, which rose 1.4% to $390.82 as of 10:21 a.m. ET Friday, plunged last month when Kimbell told a retail conference that in the first two months of the fiscal year the company saw “a slowdown in the total category across price points and segments.” Even with today’s gains, they remain down about 20% year-to-date.