Ulta Beauty Surpasses Q3 Expectations

For the third quarter ended October 31, Ulta Beauty posted net income of $71.1 million, or $1.11 per diluted share, versus $59.1 million, or 91 cents per diluted share, in the year-prior period. Comparable sales gained 12.8% versus the third quarter of fiscal 2014.

Earnings per diluted share beat a Thomson Reuters analyst average estimate by six cents.

A 10.6% growth in transactions and 2.2% growth in average ticket helped drive the retailer's 12.8% comparable sales increase. Retail comps advanced 10.9%, including salon comparable sales growth, which gained a like 10.9%. E-commerce sales grew 56.3% to $46.2 million compared with last year's period, representing 190 basis points of the company's total 12.8% comp increase, Ulta stated.

Net sales in the quarter increased 22.1% to $910.7 million from $745.7 million versus last-year's period. Operating income gained 17.7% to $110.8 million versus the 2014 quarter.

“Ulta Beauty’s excellent performance in the third quarter was highlighted by top-line momentum driven by double-digit traffic growth, leading to above-plan earnings growth,” said Mary Dillon, Ulta CEO. “Delivering against our six strategic imperatives continues to drive our business forward. We believe our efforts to build awareness of the Ulta Beauty brand are bringing more guests to discover our differentiated assortment and the benefits of our loyalty program, now boasting 17 million active members. As a result of our financial performance in the third quarter, and our position of strength heading into the holiday season, we are raising our guidance and now expect our 2015 full year earnings growth rate to be in the low twenties.”

During the third quarter, the company opened 45 stores and closed two stores. Ulta operates 860 stores.