Ulta swings to profit, beats expectations with top and bottom lines
American cosmetics retailer Ulta Beauty, Inc. announced Q1 net income of $230.3 million, or $4.10 per diluted share, on Thursday, surging out of the loss reported by the company in the prior-year period and soaring over analysts’ estimates of $1.99 per diluted share.
In the first quarter of 2020, the Bolingbrook, Illinois-based retailer’s results felt the sting from temporary store closures implemented in response to the Covid-19 pandemic, leading to a net loss of $78.5 million, or $1.39 per diluted share.
However, Ulta’s earnings for the first quarter ended May 1, 2021, also represented an improvement from the income of $192.2 million, or $3.26 per diluted share, reported by the company in the same period two years ago, before the onset of the health crisis.
Quarterly net sales at the company were $1.94 billion, topping the $1.65 billion estimate of analysts polled by FactSet, as cited by MarketWatch. This total represented a 65.2% increase compared to sales of $1.17 billion in Q1 2020 and an 11.2% rise from $1.74 billion in Q1 2019.
Comparable sales increased 65.9%, compared to a 35.3% decline in the prior-year period and a 7.0% rise in the first quarter of 2019.
“We have emerged from 2020 with strong momentum in our sales trends, market share gains, and consumer sentiment,” said Ulta Beauty president Dave Kimbell in a release. “As increasing consumer confidence, the relaxation of restrictions, and a desire for newness drive increased engagement with the beauty category, our differentiated model, combined with our ongoing efforts to create meaningful guest connections, position us well to lead through the category recovery.”
In line with its stronger than expected results, Ulta also revised its financial outlook for fiscal 2021. The company now expects its full-year net sales to be in the range of $7.7 billion to $7.8 billion, up from its previous guidance of between $7.2 billion and $7.3 billion. Comparable sales are now expected to rise between 23% and 25%, compared to a previous outlook predicting an increase of between 15% and 17%.
Finally, annual diluted earnings per share are now predicted to be in the range of $11.50 to $11.95, whereas the company had previously expected them to be between $8.85 and $9.30.
Over the course of the first quarter, Ulta opened 28 new locations and closed two, finishing the period with 1,290 stores.
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