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Online and in store, Ulta Beauty soars in Q3

BY Marianne Wilson

Ulta Beauty shows no signs of losing its momentum as the chain reported a strong quarter and raised its full-year outlook for the third time this year.

Ulta’s performance was impressive, both in brick-and-mortar and online where its sales jumped nearly 60%. (For commentary, click here.)

Ulta’s net income surged 23.2% to $87.6 million in the third quarter, up from $71.1 million in year ago period, amid strong sales.

On a per share basis, earnings came in at $1.40, for growth of 26.1% from $1.11 reported in the year-ago quarter. The robust bottom-line growth was mainly driven by solid top-line performance and lower share count.

Net sales for the third quarter increased 24.2% to a better-than-expected $1.131 billion, amid rapid growth in its loyalty program and robust online growth.

Online sales were up 59.1% over the year-ago period, rising to $73.6 million.

Same-store sales rose 16.7% — on top of a 12.8% increase in the year-ago quarter — primarily driven by 11.1% growth in transactions and 5.6% growth in average ticket.

“Ulta Beauty’s top line accelerated in the third quarter, driving record sales and earnings performance,” said Mary Dillon, CEO.

Buoyed by its strong third quarter performance, Ulta raised its fiscal 2016 outlook yet again. It now forecasts that total sales will grow in the low twenties percentage range as compared to previous guidance of a high teens percentage.

Commentary: Same-store sales are now expected to grow in a range of 13% to 15%, up from the previous growth projection of 11% to 13%. Ulta is expected to deliver earnings per share growth in the high twenties percentage range, up from its earlier guidance of mid-twenties percentage growth.

During the third quarter, the company opened 42 new locations, giving it a total of 949 stores.

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