Ulta Beauty Benefits from Return to Work, Events and Glam Trends

Scott Peters
27 May, 2022
New York City

Ulta Beauty benefitted as women return to work and increase participation in events and group activities as most Covid-restrictions end. 

The cosmetic retailer and beauty salon operator said net sales in the first quarter 2022 ended April 30 increased 21.0% to $2.3 billion. 

Comparable sales at stores open at least 14 months and e-commerce sales increased 18.0%, driven by a 10.0% increase in transactions and a 7.3% increase in average ticket.

Gross margin in the quarter edged up to 40.1% from 38.9% and operating margin rose to 18.7% from 15.8% a year ago. 

Merchandise inventories rose 14% to $1.57 billion and the increase was primarily driven by additional 28 stores and launch of new brands. 

Net income in the quarter increased to $331.4 million or $6.30 per share from $230.3 million or $4.10 a year ago. 

During the first quarter of fiscal 2022 the company spent $132.8 million in repurchasing 331,834 of its stock. 

The company said $1.87 billion of the $2.0 billion share repurchase program was still available at the end of the quarter. 

Guidance and Outlook 

The company revised its fiscal 2022 revenue outlook to range between $9.35 billion and $9.55 billion from the previous estimate of $9.05 billion and $9.15 billion. 

Comparable sales growth rate was revised higher between 6% and 8% from the previous estimate of 3% and 4%. 

For fiscal 2022 the company revised higher its estimate of diluted earnings per share to range between $19.10 to $20.10 from the previous estimate of $18.20 to $18.70. 

The company reiterated its plan to open 50 net new stores and remodel 35 stores in the current year. 

Company and Stock 

Ulta Beauty operated 1,318 stores totaling 13.9 million square feet at the end of April 2022. 

Ulta Beauty Inc soared 11.2% to $420.49 after the cosmetic retailer and beauty salon operated quarterly results. 

Ulta Beauty stock in the year-so-far has gained 0.7%.