Ulta Beauty reached and surpassed $1 billion in quarterly sales for the first time, capping off a stellar year in which profits surged nearly 27 percent.
“Our best comparable sales increase of the year was driven by accelerating traffic growth, continued strength in prestige and mass color cosmetics, a successful holiday selling season, execution of more effective marketing and CRM strategies, a double-digit comp in our salon business, and a 55 percent comparable sales increase in our e-commerce business,” said Mary Dillon, Ulta’s chief executive officer, during the company’s fourth-quarter earnings call on Thursday evening.
The Bolingbrook, Ill.-based retailer said its net income in the quarter gained 23.5 percent to $87.3 million, or $1.35 a diluted share from $70.7 million, or 1.09 cents, in the year-ago period.
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Sales for the three months ended Jan. 31 gained 20.7 percent to $1.05 billion from $868.1 million. Comparable sales increased 11.1 percent, driven by 7.7 percent growth in transactions and 3.4 percent growth in average ticket size.
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Dillon named IT Cosmetics, Tarte, Urban Decay and Too Faced among the top performers in its prestige business, with NYX and lip products driving mass sales.
She noted that Ulta’s loyalty program had grown to reach 15 million active members by the end of the fourth quarter.
Its store base continued to grow. During the quarter, Ulta added 10 doors, and closed one, to end the three-month period with 774 stores, which translated to a 14 percent increase in square footage compared with the year-ago period.
The company also announced several executive changes. Dillon said Janet Taake, chief merchandising officer of Ulta, plans to retire after six years at the company, effective May 1. She and her team are credited with adding 100 major brands to Ulta’s assortment, according to Dillon. David Kimbell, Ulta’s current chief marketing officer, will assume merchandising in the newly created role of chief merchandising and marketing officer.
For the year, net income gained 26.8 percent to $257.1 million, or $3.98 a diluted share, compared with $202.8 million, or $3.15 a share. Sales increased 21.4 percent to $3.24 billion from $2.67 billion.
The company said it plans to achieve comparable-store growth of approximately 6 to 8 percent, including its e-commerce business; increase total sales in the midteens percentage range and expand square footage by 13 percent with the opening of 100 net new doors.