Ulta shares rally on back of Q3 2019 results

Ulta shares rally on back of Q3 2019 results

THE WHAT? Ulta Beauty saw its shares rally after it announced its financial results for the third quarter of the current financial year. The company beat expectations on both the earnings and revenue front.

THE DETAILS The US retailer saw net sales grow 7.9 percent year-on-year to US$1,682.5 million, while comparable sales were up 3.2 percent, compared to an increase of 7.8 percent for the same quarter in 2018.

For the nine months ended November 2, 2019, comparable sales rose 5.4 percent, versus an increase of 7.5 percent in the equivalent period last year.

As a result, the company has updated its fiscal 2019 outlook and now expects sales to grow 10 percent over the year, versus the 9 to 12 percent range it had previously forecast.

“Our differentiated model is winning in the marketplace,” said Mary Dillon, Chief Executive Officer. “The Ulta Beauty team delivered another quarter of solid top-line performance, gross margin expansion, and EPS growth, despite the current challenges facing the U.S. cosmetics category. We continue to gain market share across all major beauty categories, and we are extending our leadership position by creating stronger connections with our guests and engaging with them in better and more exciting ways.”

THE WHY? Could Ulta’s slump be over? On an Earnings Call, CEO Mary Dillon said that she’s confident that the makeup category to emerge from its downcycle and return to growth, in the meantime, the company is leaning into categories that are experiencing stronger growth, such as skin care, adding more than 30 brands to its assortment over the last year to fully capture the opportunity and expanding Ulta’s Skin Bar model into 100 more stores.

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