Shares of Ulta Beauty rose in after-hours trading Thursday, as the corporate said its third-quarter sales rose while shoppers showed once more they’re willing to spend on fragrances, skincare and more even when the budget is tight.
The specialty beauty retailer raised the underside end of its range for full-year sales and earnings expectations. It said it expects net sales for the fiscal yr to be between $11.10 billion and $11.15 billion, and comparable sales to range from 5.0% to five.5%. It said adjusted earnings per share for the yr will range from $25.20 to $25.60.
On an earnings call with investors, CEO Dave Kimbell said the retailer saw healthy traffic at its stores and on its website. He said the corporate expects a more promotional holiday season in the wonder category this yr, however the season is “off to a great start” and stores are stocked with “each value-first and splurge-worthy items.”
“Our insights suggest that buyers are able to have fun at the same time as they navigate in an uncertain economic environment,” he said.
Here’s what Ulta reported for the three-month period that ended Oct. 28:
- Earnings per share: $5.07
- Revenue: $2.49 billion
It was not clear if those numbers were comparable to consensus estimates from LSEG, formerly often called Refinitiv.
The corporate’s shares rose as much as 10% in prolonged trading.
Ulta also announced a leadership change Thursday. Chief Financial Officer Scott Settersten is retiring in April after nearly 20 years at the wonder retailer. The corporate said he might be replaced by Paula Oyibo, Ulta’s senior vice chairman of finance.
Within the fiscal third quarter, net income rose to $249.5 million, or $5.07 per share, from $274.6 million, or $5.34 per share, within the year-ago period. Revenue increased from $2.34 billion within the year-ago period.
Comparable sales, a metric that tracks Ulta stores open not less than 14 months together with online sales, increased 4.5% yr over yr.
Through the quarter, customers made more trips to Ulta’s stores and website, but spent barely less. Transactions went up by nearly 6% and average ticket declined by 1.4% compared with the year-ago period.
Beauty has been considered one of the most popular categories for retailers over the past yr. At the same time as consumers pull back on other sorts of discretionary purchases, they’ve continued to spend on makeup, face masks, fragrances and more.
That is inspired retailers, including Macy’s, Goal and Kohl’s to lean into the category by adding recent brands, products and square footage. Goal, for instance, has a growing variety of Ulta shops in its stores.
In Ulta’s third quarter, nearly every category saw growth. Skincare was Ulta’s fastest-growing segment in the course of the period, posting double-digit growth yr over yr, Kimbell said on an earnings call with investors Thursday. The fragrance and bath category grew by low double digits.
Sales within the makeup category were flat, as mid-single-digit growth in mass brands of makeup offset a decline in prestige makeup, he said. Sales within the hair segment decreased within the low single-digit range, as customers bought fewer hair tools.
Kimbell noted the resilience of the wonder category in nearly every economic environment. On the earnings call, he referred to data from Euromonitor that showed that the U.S. beauty category has grown within the low- to mid-single-digit range every yr for greater than a decade, except in the course of the Great Recession and in 2020 in the course of the Covid pandemic.
“While we expect growth will proceed to normalize to historic ranges, we remain confident the category will proceed to grow, barring a macroeconomic event,” he said.
He said customers will not be only coming to Ulta’s stores and website to hunt recent brands and products but in addition seeing beauty as a part of their wellness routine.
As of Thursday’s close, Ulta shares had fallen about 9% to this point this yr. That compares with the S&P 500, which is up about 19% yr to this point.
Shares of the corporate closed at $425.99 on Thursday, bringing the corporate’s market value to about $20.97 billion.
