Ulta posts Q2 net sales increase of 17.6%, net income up 127.2%

BOLINGBROOK, Ill. Beauty retailer Ulta on Thursday announced a net sales increase of 17.6% to $321.8 million for its second quarter, ended July 31, compared with $273.5 million in the same period last year.

Comparable-store sales increased 10.8%, compared with a decrease of 1.7% in second quarter 2009. Gross profit increased 350 basis points to 32.3% from 28.8% last year.

Operating income increased 117.4% to $22.3 million, or 6.9% of net sales, compared with $10.2 million, or 3.7% of net sales, in the prior-year period. Net income increased 127.2% to $13.1 million compared with $5.8 million in the second quarter of fiscal 2009. Income per diluted share more than doubled to 22 cents, including 3 cents per diluted share related to the nonrecurring compensation charge. Income per diluted share was 25 cents, excluding the nonrecurring compensation charge.

“We are very pleased to report an excellent second quarter 2010 performance," said Lyn Kirby, CEO of Ulta. "Despite a slow economic recovery, the momentum on our business is very strong as we reap the benefits of our market share strategies implemented in 2009 and continue to execute against these strategies in 2010. Growth was balanced across all major product categories. Our performance reflects the continued strength of our business model with dynamic marketing, compelling merchandising, new brand introductions and the continued leverage of our powerful loyalty program.”

“We begin the third quarter with very strong momentum fueled by the continuation of our marketing, merchandising and stores expansion strategies,” stated Chuck Rubin, president and COO. “During the third quarter we expect to continue to drive traffic and average ticket growth as we leverage our loyalty program, offer compelling value and introduce new brands. The third quarter will include the continued brand introduction of Philosophy skin care and the launch of Tarte in prestige cosmetics. Our store expansion plans remain on track to deliver 28 new stores in the third quarter and a 13% increase in square footage growth for the year. We will also maintain our judicious control of expenses and inventory. As our guidance suggests, we expect to deliver continued strong results in the third quarter.”

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