Post-COVID-19 pandemic demand from a consumer concerned about wellness and self-care as well as internal innovation and new products helped Ulta Beauty generate strong second-quarter results.
The company topped a MarketBeat-published analyst consensus estimate that called for earnings per diluted share of $5 and revenue of $2.2 billion.
Comparable sales advanced 14.4% in the quarter year over year, driven by an 8.3% increase in transactions and a 5.6% increase in average ticket, the company stated. Net sales increased to $2.3 billion from $1.97 billion in the 2021 quarter, Ulta noted, due to the favorable impact from the continued resilience of the beauty category, the impact of new brands and product innovation, and the easing of COVID-19 restrictions versus the year-past period. Operating income increased 17.8% to $391.4 million from the quarter a year prior.
In a conference call, Dave Kimbell, Ulta CEO, said consumer engagement with beauty remains powerful, reflecting a strong emotional connection with the category and the continued importance of self-care and wellness. He added that newness has appealed to customers with recently introduced brands, such as Drunk Elephant, Fresh, Supergoop!, and freshly rolled out Vacation, as well as new products from Peach & Lily, OSEA, and Hero cosmetics, contributing to category growth in the second quarter.
Kimbell also said that Ulta continues to enhance and expand its partnership with Target, opening 59 Ulta Beauty at Target shops in the second quarter, which ended with 186 locations. Ulta refreshed the Target assortment recently by expanding the fragrance offering, launching two Black-owned brands, Sunday to Sunday and Melanin Haircare, and introducing newness from existing brand partners such as Benefit, Morphe and Tula.
“Strong consumer demand and broad-based momentum across our business continued as our teams executed our plans with excellence,” said Kimbell, in announcing the second quarter results. “For the quarter, we delivered double-digit comparable sales growth across all major categories and increased profitability, demonstrating the strength of our model and the commitment of our teams. As we look to the second half of the year, we continue to operate in a dynamic environment, but I am confident that our unique model and one-of-a-kind assortment, paired with the strong emotional connection guests have to beauty, position us well to continue to deliver profitable growth.”