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Ulta Beauty Q2 net income up 28%; new CEO outlines growth strategy

Bolinbrook, Ill. -- Ulta Beauty reported that its second quarter net income rose 28.3% to $44.9 million, compared with $35 million in the year-ago period.

The company posted a 24.8% boost in second quarter net sales as CEO Mary Dillon outlined some of the key priorities for her first 100 days at the helm of the beauty retailer. Dillon, a former PepsiCo executive, joined the company as CEO on July 1. She succeeded Chuck Rubin, who left the company to become CEO at Michaels Stores.

“Our second quarter performance highlights many of the reasons I decided to join Ulta. We operate in an industry that's growing and important to our guests. Ulta has a differentiated format that resonates with customers. We have a solid long-term growth strategy and a strong team that's executing that strategy very well,” Dillon told analysts during Thursday’s conference call.

Dillon said that she doesn’t plan to make any “radical changes” to the company’s growth strategy, but rather plans to “expand and build upon” the foundation.

She noted that the beauty category is expected to continue to grow 3% to 4% over the long term, and she is optimistic that Ulta Beauty can continue to capture market share.

“I expect that share gains will come through new store growth, healthy same-store sales growth, driven by new customer acquisition and more frequent visits of existing customers who are attracted by newness in our offering and the strength of our marketing and loyalty programs,” Dillon said.

Outlining her key priorities for her first 100 days on the job, Dillon told analysts, “First and foremost, I plan to work with the team to deliver the 2013 financial performance that we've planned. Another top priority is supporting our store growth plans. At the same time, I'll be focused on addressing business needs in the area of supply chain and our digital omni-channel approach. I'll also be assessing the organization's talent, capabilities and culture needs as we continue to aggressively grow the business. I'll also spend time getting to know key vendor partners, and of course, analysts and investors.”