Ulta Beauty on Thursday said second-quarter income rose 83 percent on a sales increase of 22.6 percent.
For the three months ended July 30, income rose to $23.9 million, or 38 cents a share, from $13.1 million, or 22 cents a share, in the year-ago period. Sales were $394.6 million from $321.8 million, while comparable-store sales rose 11.3 percent.
During the beauty chain’s conference call, executives said several brands and in-store events helped shape Ulta’s second quarter, including the launch of Benefit’s They’re Real mascara, which led to the chain’s highest-ever weekly sales of mascara. Items by Philosophy, Urban Decay and Tarte helped drive sales, as well as nail items, namely OPI’s Shattered, the chain’s top nail brand. Sales of men’s grooming products were boosted by Ulta’s new Men’s Shop, which merchandises men’s products in one setting. Fragrance saw gains, too, specifically Bleu de Chanel, Gucci Pour Homme and Justin Bieber. Professional hair care sales were driven by Living Proof, AG and PureOlogy.
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Analysts during Ulta’s conference call were most excited by the news that Lancôme skin care and color cosmetics have entered 28 stores, prompting Chuck Rubin, Ulta’s president and chief executive officer, to discuss the partnership.
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“It’s good for our guests, and it opens up new guests for Lancôme. We continue to take market share and [to outperform] department stores. We are pleased where we are, and we’ll see where we go from there.”
Rubin added Ulta will support the regional launch of Lancôme with advertising.
“We wanted to have some density [in our regional launch] so we could advertise and put the power of Ulta behind this brand introduction. That [went] to work this past Sunday in an [Ulta] mailer.”
A partnership with Condé Nast was also struck during the quarter, and kicked off this weekend. The deal allows Ulta to use editorial from various Condé Nast titles, namely Allure and Glamour, on its Web site and in stores. Ulta will offer their customers exclusive low prices on subscription renewals of Allure and Glamour.
“This is a tremendous deal for our guests. We hope [the partnership] lasts a long time. It could lead to some very interesting places,” said Rubin. Condé Nast is parent to Fairchild Fashion Media, under which Women’s Wear Daily operates.
The company said it expects third-quarter diluted earnings per share between 36 cents and 38 cents, on a projected sales range of $400 million to $407 million. That compares with diluted EPS of 23 cents, which included a 2-cent-a-share non-recurring compensation charge, in the third quarter of 2010 on sales of $339.2 million.
During the third quarter, 26 new stores are expected.