Ulta poised to open 100 stores following stellar fiscal 2016
Ulta Beauty closed a very successful fiscal year with a solid fourth quarter performance. The company followed a record third quarter with a 24.6% increase in fourth quarter net sales to $1,580.6 million and a 30.0% increase in net income to $140.2 million.
Comparable sales for the quarter increased 16.6% driven by 10.9% growth in transactions and 5.7% growth in average ticket. Retail comparable sales jumped 12.8%, salon sales rose 15.2% to $62.9 million, and e-commerce sales grew 63.4% to $154.9 million.
Gross profit as a percentage of net sales decreased 10 basis points to 34.5%, due to planned supply chain investments and a higher mix of e-commerce sales. SG&A expenses decreased 110 basis points to 20.0% as a percentage of net sales.
Income per diluted share increased 32.5% to $2.24 versus $1.69 in the previous year.
“The Ulta Beauty team delivered outstanding fourth quarter results, capping an exceptional year of sales and earnings growth while investing to drive market share gains and create sustainable long term shareholder value,” said Mary Dillon, Chief Executive Officer.
The fourth quarter put a cap on a solid fiscal year performance for Ulta. Full year net sales jumped 23.7% to $4,854.7 million, comparable sales reached the top end of expectations increasing 15.8%, gross profit as a percentage of net sales increased 70 basis points, and net income rose 28.0% to $409.8 million. Also, income per diluted share increased 30.9% to $6.52.
Ulta increased its financial outlook every quarter to match its performance throughout the year. The beauty company in 2016 announced plans to expand its retail footprint to 1,700 stores, which includes 25 new stores that opened in the year and its first store in Manhattan that will open in the coming months. Ulta also reorganized its business structure at the end of fiscal 2016 in order to be more efficient, and announced that it will begin carrying MAC Cosmetics in early June. This marks as the first time MAC products will be available outside of its stores.
For fiscal 2017, Ulta plans to achieve comparable sales growth of 8% to 10%, grow e-commerce sales in range of 40%, open 100 new stores, and deliver earnings per share growth in the low twenties percentage range.
First quarter net sales are expected to range between $1,244 million and $1,265 million, and income per diluted share is projected to be in range of $1.75 and $1.80.
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