Strong Customer Demand Leads Ulta Beauty To A 21% Sales Increase

Ulta Beauty launched its first quarter earnings for the fiscal 2022 yr with gross sales up 21% to $2.3 … [+] billion in comparison with final yr.

Courtesy of Ulta Beauty

Ulta Beauty launched its first quarter (Q1) earnings for the fiscal 2022 yr with gross sales up 21% to $2.3 billion in comparison with the identical quarter final yr. Fiscal 2022 is beginning off effectively for the wonder retailer with gross sales doubling from 2020, reaching 2.3 billion for Q1. Net income soared 44% over Q1 2021 to $331 million. “The Ulta Beauty staff delivered distinctive first-quarter outcomes, with better-than-expected gross sales and earnings development, supported by double-digit comparable gross sales development throughout all main classes,” stated Dave Kimbell, CEO of Ulta Beauty. “Solid execution of our methods, paired with sturdy visitor demand, fueled our monetary efficiency and continued market share good points as we delighted our friends with thrilling model launches inside our one-of-a-kind assortment and differentiated visitor experiences.”

Consumer conduct stays sturdy
Kimbell mentioned that regardless of tight labor markets, provide chain challenges, and working value pressures, the outcomes confirmed sturdy continued client demand as extra individuals are getting out and purchasing in bodily shops and touring. “With the sturdy client demand and robust execution of the Ulta Beauty staff, we have been capable of ship wonderful outcomes for the primary quarter.” More individuals are going again to work and attending extra social occasions so there was a rise within the make-up class, whereas on the identical time magnificence lovers are persevering with their sturdy skincare wellness routines. New traits in make-up favor glam and glitter, whereas the pure look from the pandemic stays related.

While the inflationary surroundings is being watched intently, the corporate has not seen a huge effect on purchasing conduct or any sort of trade-down conduct. Prestige magnificence outperformed mass magnificence and helped ship stronger margins for the corporate. New model strikes akin to Mac increasing into a complete of 233 shops and Chanel Beauty being launched into 104 shops helped drive the class. Prestige manufacturers akin to Fenty Beauty, Olaplex and REM Beauty By Ariana Grande helped with driving gross margin as client demand was sturdy.

Gross margin larger than final yr

Ulta Beauty expanded Black owned model Black Girl Sunscreen into all shops. Shontay Lundy … [+] (pictured) based the model in 2016.

Courtesy of Ulta Beauty

Ulta Beauty’s gross margin was 40.1% in comparison with final yr at 38.9% which contributed to web revenue reaching $331 million. Increased make-up demand together with continued skincare purchases from magnificence lovers and excessive buyer engagement contributed to stronger margins. Suncare was one other class that carried out effectively together with the enlargement of Black Girl Sunscreen into all shops. Ulta Beauty continues its effort to offer assortments that attraction to BIPOC clients by including BIPOC-owned manufacturers akin to Beautystat, Fenty Beauty and Mielle Organics to the product assortment.

New sources of income
UB media was launched by Ulta Beauty as a retail media community that provides model companions promoting and insights on client conduct making the most of the strong first-party information of its over 37 million loyalty members. Kimbell stated, “UB Media helps our vendor companions to construct related model campaigns and creates an added income stream for Ulta Beauty.” Retail media networks are owned by retailers who promote promoting alternatives and supply buyer insights from their first-party information to model companions which drive promotional efforts for each corporations.

Full-year 2021 and outlook for 2022
Ulta Beauty launched its full-year monetary leads to March displaying a web gross sales improve of 40% for the fiscal yr 2021. Net revenue was $985.8 million in comparison with final full yr at $175.8 million, up 461%.

The outlook for the complete yr 2022 was up to date to incorporate comparable gross sales will increase of 6-8% (beforehand 3-4%) reaching over $9.4 billion. At the top of the primary quarter of fiscal 2022, Ulta Beauty operated 1,318 shops with over 25,000 merchandise from greater than 600 magnificence manufacturers throughout all worth factors. The firm has 37.7 million Ultamate Rewards members who account for 95% of the overall gross sales, which is 17% larger than Q1 final yr.

https://www.forbes.com/sites/shelleykohan/2022/05/26/strong-customer-demand-leads-ulta-beauty-to-a-21-sales-increase/