Net Sales For Ulta Beauty Increase To $2.5 Billion in Q3 2023

Net sales for Ulta Beauty increased 6.4% to $2.5 billion – compared to $2.3 billion the prior-year quarter – due primarily to increased comparable sales, strong new store performance and strong growth in other revenue.

 

The results reflect the 13-week period and the first nine months ended Oct. 28, 2023 compared to the same periods ended Oct. 29, 2022. 

 

Comparable sales (sales for stores open at least 14 months and e-commerce sales) increased 4.5% compared to an increase of 14.6%, driven by a 5.9% increase in transactions and a 1.4% decrease in average ticket.

 

“The third quarter represented another strong performance by the Ulta Beauty team, as sales, gross profit, and diluted EPS all exceeded our internal expectations,” said David Kimbell, CEO. “Our traffic trends remained healthy, our brand awareness increased, and we expanded our loyalty program to a record 42.2 million members. As we look to the future, the outlook for the Beauty category is bright, and I am confident Ulta Beauty has the right plans in place to delight our guests this holiday season, expand our leadership position in specialty beauty retail, and deliver long-term shareholder growth.”

 

Gross profit increased 3.0% to $992.1 million compared to $962.8 million. As a percentage of net sales, gross profit decreased to 39.9% compared to 41.2%, primarily due to lower merchandise margin, higher inventory shrink, and higher supply chain costs, partially offset by strong growth in other revenue.

 

Selling, general and administrative (SG&A) expenses increased 10.8% to $661.4 million compared to $597.2 million. As a percentage of net sales, SG&A expenses increased to 26.6% compared to 25.5%, primarily due to higher corporate overhead due to strategic investments, higher store expenses, higher store payroll and benefits, and higher marketing expenses, partially offset by lower incentive compensation.

 

In the first nine months of Fiscal 2023 compared to the prior-year period, net sales increased 9.6% to $7.7 billion compared to $7.0 billion, primarily due to increased comparable sales, strong new store performance, and strong growth in other revenue.

 

Comparable sales increased 7.3% compared to an increase of 15.6%, driven by an 8.7% increase in transactions and a 1.4% decrease in average ticket.

 

Gross profit increased 7.4% to $3.0 billion compared to $2.8 billion. As a percentage of net sales, gross profit decreased to 39.7% compared to 40.6%, primarily due to lower merchandise margin, higher inventory shrink, higher supply chain costs, and deleverage of salon expenses, partially offset by strong growth in other revenue and leverage of store fixed costs.
 

SG&A expenses increased 14.8% to $1.9 billion compared to $1.6 billion. As a percentage of net sales, SG&A expenses increased to 24.5% compared to 23.4%, primarily due to higher corporate overhead due to strategic investments, higher store payroll and benefits, higher marketing expenses, and higher store expenses, partially offset by lower incentive compensation.
 

Operating income was $1.16 billion, or 15.2% of net sales, compared to $1.19 billion, or 17.1% of net sales.

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