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Ulta Posts Positive Q3

Net sales rise 22.1% at growing beauty retailer.

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By: Tom Branna

Ulta Posts Positive Q3

Ulta Beauty says net sales in the third quarter increased 22.1% to $910.7 million, up from $745.7 million in the same quarter of fiscal 2014. Comparable sales (sales for stores open at least 14 months and e-commerce sales) increased 12.8% compared to an increase of 9.5% in the third quarter of fiscal 2014. The 12.8% comparable sales increase was driven by 10.6% growth in transactions and 2.2% growth in average ticket, according to the beauty retailer.
 
Salon sales increased 20.0% to $51.7 million from $43.1 million in the third quarter of fiscal 2014.
 
Ulta said its gross profit for Q3 decreased 90 basis points to 36.9% from 37.8% in the third quarter of fiscal 2014 primarily due to supply chain initiatives including its new Greenwood, IN distribution center, the company’s fourth.
 
Net sales for the first nine months of the year increased 21.1% to $2.65 billion million from $2.19 billion in the first nine months of fiscal 2014. E-commerce comparable sales for the nine months grew 50.2%.
 
“Ulta Beauty’s excellent performance in the third quarter was highlighted by top line momentum driven by double digit traffic growth, leading to above-plan earnings growth,” said Mary Dillon, CEO. “Delivering against our six strategic imperatives continues to drive our business forward. We believe our efforts to build awareness of the Ulta Beauty brand are bringing more guests to discover our differentiated assortment and the benefits of our loyalty program, now boasting 17 million active members. As a result of our financial performance in the third quarter and our position of strength heading into the holiday season, we are raising our guidance and now expect our 2015 full year earnings growth rate to be in the low twenties.”
 
During the third quarter, the company opened 45 stores, ending with 860 stores and square footage of 9,080,084.

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