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Ulta Beauty posts 24.8% rise in Q2 sales

BY Antoinette Alexander

BOLINBROOK, Ill. — Ulta Beauty reported a 24.8% boost in second quarter net sales as CEO Mary Dillon outlined some of the key priorities for her first 100 days at the helm of the beauty retailer.

Dillon, a former PepsiCo executive, joined the company as CEO on July 1. She succeeded Chuck Rubin, who left the company to become CEO at Michaels Stores. Serving as interim CEO following Rubin’s departure was Dennis Eck.

“Our second quarter performance highlights many of the reasons I decided to join Ulta. We operate in an industry that’s growing and important to our guests. Ulta has a differentiated format that resonates with customers. We have a solid long-term growth strategy and a strong team that’s executing that strategy very well,” Dillon told analysts during Thursday’s conference call.

Dillon said that she doesn’t plan to make any “radical changes” to the company’s growth strategy, but rather plans to “expand and build upon” the foundation.

She noted that the beauty category is expected to continue to grow 3% to 4% over the long term, and she is optimistic that Ulta Beauty can continue to capture market share.

“I expect that share gains will come through new store growth, healthy same-store sales growth, driven by new customer acquisition and more frequent visits of existing customers who are attracted by newness in our offering and the strength of our marketing and loyalty programs,” Dillon said.

Outlining her key priorities for her first 100 days on the job, Dillon told analysts, “First and foremost, I plan to work with the team to deliver the 2013 financial performance that we’ve planned. Another top priority is supporting our store growth plans. At the same time, I’ll be focused on addressing business needs in the area of supply chain and our digital omni-channel approach. I’ll also be assessing the organization’s talent, capabilities and culture needs as we continue to aggressively grow the business. I’ll also spend time getting to know key vendor partners, and of course, analysts and investors.”

During the quarter ended Aug. 3, the beauty retailer posted net sales of $601 million, up 24.8% compared with the year-ago period. Same-store sales rose 8.4%.

Net income rose 28.3% to $44.9 million compared with $35 million in the year-ago period. Income per diluted share was 70 cents per share compared with 54 cents per share in the year-ago period, an increase of 29.6%.

During the quarter, the retailer expanded its new products and brands with such recent launches as IT Cosmetics, Jane Cosmetics, Mally Girl and Meaningful Beauty.

In addition, its loyalty program membership grew to 12 million active members, up 19% compared with the year-ago period.

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FDA issues sweeping new requirements for long-acting opioids

BY Alaric DeArment

SILVER SPRING, Md. — Companies that make long-acting opioid painkillers will be required to conduct studies to assess their safety, while use of the drugs will be restricted, under new requirements from the Food and Drug Administration.

The agency announced new labeling changes and regulatory requirements for makers of extended-release and long-acting opioids, citing the risk the drugs carry of overdose, abuse and withdrawal. In response, a group also cautioned consumers to be careful when using non-steroidal anti-inflammatory drugs.

Among the changes, the language on the drugs’ safety labels will state that they should be used to manage pain severe enough to require daily, around-the-clock, long-term opioid treatment when alternatives are unavailable, but they should not be used on an as-needed basis. In addition, they should be reserved for patients for whom alternatives such as non-opioid drugs are ineffective or unsafe. The drugs were previously indicated for moderate to severe pain in patients requiring continuous, around-the-clock treatment for an extended period of time.

Drugs affected by the decision include Purdue Pharma’s OxyContin (oxycodone) and Endo’s Opana ER (oxymorphone), as well as other branded and generic drugs in the class.

"The FDA is invoking its authority to require safety labeling changes and post-market studies to combat the crisis of misuse, abuse, addiction, overdose and death from these potent drugs that have harmed too many patients and devastated too many families and communities," FDA commissioner Margaret Hamburg said. "Today’s action demonstrates the FDA’s resolve to reduce the serious risks of long-acting and extended-release opioids while seeking to preserve appropriate access for those patients who rely on these medications to manage their pain."

For clinical trials, drug companies will be required to assess known risks of misuse, abuse, increased sensitivity to pain, addiction, overdose and death. Another labeling change will warn that chronic use of the drugs during pregnancy can result in infants having neonatal opioid withdrawal syndrome, a potentially life-threatening condition.

Following the FDA’s announcement, the Eugene, Ore.-based Alliance for Rational Use of NSAIDs said that because many health professionals and patients would likely look to prescription and OTC NSAIDs as alternatives for pain management, consumers should use any NSAID at the lowest effective dose for the shortest period of time required to achieve a desired therapeutic outcome.

"Proper use of NSAIDs can save at least 100,000 hospital admissions per year," alliance chairman Byron Cryer said. "The alliance’s mission to support safe and effective use of NSAIDs is critical, particularly as the FDA limits the use of extended-release [and] long-acting opioids."


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CVS Caremark showcases outreach program to help customers understand health insurance options

BY Antoinette Alexander

WOONSOCKET, R.I. — CVS Caremark on Friday showcased the details of a companywide information and outreach program to help customers navigate their insurance options under the new healthcare law during a store visit in Orlando with U.S. Health and Human Services Secretary Kathleen Sebelius.

(Photo: CVS Caremark’s Larry Merlo discusses the pharmacy retailer’s outreach program with U.S. Health and Human Services Secretary Kathleen Sebelius)

The program includes retail events and brochure displays at more than 7,500 CVS/pharmacy stores and 650 MinuteClinic locations. Information is also available online at cvs.com/insurance.

"Providing information about new health insurance coverage opportunities is in keeping with our purpose of helping people on their path to better health," stated Larry Merlo, president and CEO of CVS Caremark, who led the tour with Sebelius. "Over the coming months, our pharmacists and stores will be serving a key role in providing a point of activation for customers to learn more."

A recent CVS Caremark survey found that pharmacies will be a primary resource to meet the needs of uninsured Americans, with 68% of those surveyed expecting retail pharmacies to offer health insurance information in store and/or online. Among those asking for help, Hispanics and the youngest group surveyed (aged 18 to 35) were significantly more likely to say they need help understanding the exchanges.

"Families look to their local pharmacy as a place they can go to for honest, straightforward advice they can trust," stated HHS Secretary Kathleen Sebelius. "Americans trust their pharmacists for tell-it-like-it-is advice about their health, and pharmacies, like CVS, have a special role in these efforts. We thank CVS Caremark and CVS stores nationwide for their commitment to providing Americans with the information they need about the Health Insurance Marketplace."

CVS/pharmacy will also be hosting approximately 5,000 in-store events with health insurance experts, including representatives of state exchanges and local health plans. In addition, in September, representatives from Get Covered America will be available at CVS/pharmacy Project Health free health screening events.


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