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Shoppers arrive at an Ulta Beauty store in Las Vegas, Nevada, US, on Monday, May 22, 2023. Ulta Beauty Inc. is scheduled to release earnings figures on May 25.
Bridget Bennett | Bloomberg | Getty Images
Shares of Ulta Beauty rose in after-hours trading on Thursday, as the company said its third-quarter sales rose while shoppers showed once again they’re willing to spend on makeup, face masks and more even when the budget is tight.
The specialty beauty retailer raised the bottom end of its range for full-year sales and earning expectations. It said it expects net sales for the fiscal year to be between $11.10 billion and $11.15 billion, and comparable sales to range from 5.0% to 5.5%. It said adjusted earnings per share for the year will range from $25.20 to $25.60
In a news release, CEO Dave Kimbell said the retailer saw healthy sales trends and added customers to its loyalty program. He said it’s ready for the holidays and believes “the outlook for the Beauty category is bright.”
Here’s what Ulta reported for the three-month period that ended Oct. 28:
- Earnings per share: $5.07
- Revenue: $2.49 billion
It was not immediately clear if those numbers were comparable to consensus estimates from LSEG, formerly known as Refinitiv.
The company’s shares rose as much as 10% in extended trading.
Ulta also announced a leadership change on Thursday. Chief Financial Officer Scott Settersten is retiring in April after nearly two decades at the beauty retailer. The company said he will be replaced by Paula Oyibo, Ulta’s senior vice president of finance.
In the fiscal third quarter, net income rose to $249.5 million, or $5.07 per share, from $274.6 million, or $5.34 per share, in the year-ago period. Revenue increased from $2.34 billion in the year-ago period.
Comparable sales, a metric that tracks Ulta stores open at least 14 months along with online sales, increased 4.5% year over year.
During the quarter, customers made more trips to Ulta’s stores and website, but spent slightly less. Transactions went up by nearly 6% and average ticket declined by 1.4% compared with the year-ago period.
Beauty has been one of the hottest categories for retailers over the past year. Even as consumers pull back on other types of discretionary purchases, they have continued to spend on makeup, face masks, fragrances and more.
That’s inspired retailers, including Macy’s, Target and Kohl’s to lean into the category by adding new brands, products and square footage. Target, for example, has a growing number of Ulta shops in its stores.
As of Thursday’s close, Ulta shares had fallen about 9% so far this year. That compares to the S&P 500, which is up about 19% year to date.
Shares of the company closed at $425.99 on Thursday, bringing the company’s market value to about $20.97 billion.
This is breaking news. Please check back for updates.
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