Ulta Posts 16% Sales Gain for Q3

MAC Cosmetics, prestige skin care and sun care were growth drivers at Ulta Beauty for the third quarter, the company said on its earnings call Thursday.
"We benefitted from double-digit comp growth in MAC Cosmetics, prestige skin care, fragrance, prestige boutique brands and sun care," said Mary Dillon, Ulta chief executive officer.
Overall, prestige makeup seems to be stabilizing, she noted.
"We're really optimistic about makeup," said Dave Kimbell, Ulta's chief merchandising and marketing officer. "There's certainly a strengthening in skin care, but we feel our consumers remain very engaged in makeup." That makeup interest is supported by demographic trends, he said, which has led Ulta to focus more on digitally native brands.
The company recently launched an "emerging brands team" to focus on new, often digitally native brands, Dillon added. That team will on-board and incubate smaller brands that aren't necessarily used to doing business in a retail environment.
Several direct-to-consumer brands, like Kylie Cosmetics, Morphe, Beauty Bakerie and Juvia's place, were called out on the retailer's call with Wall Street.
Kylie Cosmetics, which launched 28 stockkeeping units with Ulta just before Thanksgiving is doing well, according to Kimbell, who noted that Ulta has an exclusive Kylie holiday kit that is not available on the brand's web site.
Ulta also has the exclusive on James Charles' Artistry eye shadow palette with Morphe, Dillon noted, and Morphe has an "elevated presentation" in Ulta stores.
For the third quarter, Ulta's net sales were up 16.2 percent, to $1.56 billion. Net income also rose 25.3 percent to $131.2 million. E-commerce sales were up 42.5 percent, to $170.7 million.
For the first nine months of the year, Ulta posted a 16.3 percent increase in sales to $4.59 billion. Net income was up 27.9 percent to $443.9 million.
For the fourth quarter, Ulta is expecting net sales between $2.085 billion and $2.1 billion.
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