Ulta has raised its full-year outlook on the back of better-than-expected second-quarter results as consumers continue to open their wallets at the beauty counter despite an uncertain economic backdrop.
Net sales increased 16.8 percent year-over-year to $2.3 billion in the second quarter of the fiscal year, compared to $2 billion in the same period a year earlier 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,” the company said. Analysts had forecasted sales of around $2.2 billion, according to a Factset poll.
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All major categories exceeded Ulta’s expectations, and the retailer increased market share in prestige beauty versus last year. Compared to the second quarter of 2021, both prestige and mass makeup delivered double-digit comp growth.
Net income increased 17.8 percent to $295.7 million compared to $250.9 million in the second quarter of fiscal 2021. Diluted earnings per share increased 25 percent to $5.70, compared with Wall Street estimates of $4.99.
“Strong consumer demand and broad-based momentum across our business continued as our teams executed our plans with excellence,” said Dave Kimbell, chief executive officer at Ulta. “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.”
Kimbell continued, “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.”
The company raised its outlook for fiscal 2022. It now expects net sales in the region of $9.65 billion to $9.75 billion, up from $9.35 billion to $9.55 billion. Diluted earnings per share are expected to be $20.70 to $21.20, up from $19.20 to $20.10.
“As we look to the future, we know there will be challenges, particularly with the wide-ranging impact of rising inflation, both on our business and our guests. But we remain confident in the resilience of the beauty category and our ability to lead the beauty category and drive long-term profitable growth,” added Kimbell during a call with analysts.