Ulta is kickin it with Kylie
Even if same-store sales at Ulta continue to decelerate, the beauty retailer has a new secret weapon to reverse that decline.
Ulta Chief Executive Officer Mary Dillon confirmed the beauty retailer has landed an exclusive partnership with Kylie Jenner’s brand during a call with investors on Thursday. The announcement came on the same day that Ulta announced second quarter earnings results showing positive but lower comps.
The retailer also announced it will be adding the popular Kiehl's skin care brand.
“The Ulta Beauty team delivered a strong performance in the second quarter, reflecting rapid growth in prestige boutique brands, mass cosmetics, skin care and fragrance, offset by continued moderation in the growth rates of a few of our large color cosmetics brands,” said Mary Dillon, chief executive officer. “Our flexible business model continues to support healthy retail comps, excellent new store productivity, and high growth for Ulta.com, resulting in significant market share gains across categories.”
Same-store sales growth at Ulta was strong at 6.5 percent for the second quarter ended Aug. 4, but much less than the 8.1 percent increase in the first quarter and much less than the double-digit increases seen in previous quarters. Last year Ulta's second quarter comp was 11.7 percent.
While sales growth at Ulta does seem to be on a downward trend, the growth is still much more impressive than any of Ulta's retail peers can manage in this day and age of Amazon. Retail Leader featured Ulta Beauty in its May/June issue.
Ulta Beauty saw 37.9 percent surge in e-commerce sales to $132.8 million, reflecting about 250 basis points (bps) of total comps growth in the quarter under review.
Ulta Beauty’s adjusted earnings came in at $2.46 per share in the second quarter. Net revenues grew 15.4 percent year over year to $1,488.2 million. Gross profit improved 14.1 percent year over year to $535.5 million. However, gross profit margin fell 40 bps to 36 percent.
During the fiscal second quarter, the company registered transaction growth of 3.1 percent while the average ticket was up 3.4 percent.
Sales for the salon business grew 8.8 percent to $74 million.
During the second quarter, the company opened 19 stores and ended the quarter with 1,124 stores and square footage of 11,824,009, representing an 11.2 percent increase in square footage compared to the second quarter of fiscal 2017.