BEAUTY CARE

Ulta off to ‘terrific start’ with strong Q1

BY Antoinette Alexander

BOLINGBROOK, Ill. — Beauty retailer Ulta had a "terrific start to the year," as it posted strong double-digit gains in both net sales and same-store sales during the first quarter.

For the quarter ended April 30, net sales rose 20.6% to $386 million. Same-store sales rose 11.1%, compared with an increase of 10.8% in the year-ago period.

Net income increased 70.5% to $23.3 million, or 37 cents per diluted share.

"During the quarter, we gained market share advancing each of the priorities we set at the beginning of the year," Ulta president and CEO Chuck Rubin said. "To this end, we were pleased with our new store performance and remain on track to expand square footage by 16% this year. We generated consumer excitement and heightened interest in Ulta with newness across categories, brands and services. In addition, we saw robust growth in guest count in our Ulta stores and at Ulta.com as we leveraged our active 8 million member loyalty base and delivered compelling social media, email and direct mail marketing campaigns."

For the second quarter, the company expects net sales in the range of $378 million to $384 million, compared with actual net sales of $321.8 million in second quarter 2010. This assumes a same-store sales increase of 6% to 8%.

Income per diluted share during the second quarter is estimated to be between 31 cents and 33 cents.

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Skin by Monica coming to select Walgreens

BY Antoinette Alexander

LOS ANGELES — Skin by Monica, an all-natural line of skin and hair care products for women, men and babies, is expanding its distribution and will be available in select Walgreens locations in August.

"We are pleased to bring another innovative beauty brand to our eco-conscious, ingredient-savvy customer," stated Shannon Petree, Walgreens divisional VP and GMM for beauty. "Natural skin care is not a passing trend. Today’s beauty shopper wants to feel good about the products she uses while receiving the results she expects. Customers will be pleased to find this hot new brand that has beauty blogs buzzing at their neighborhood Walgreens store."

The Skin by Monica collection offers more than 52 skin and hair care products for women, men and babies, which are all free of parabens, urea, alcohol, petroleum and other harmful chemicals. The products are organic and 100% natural, made with vitamins and minerals from the earth, packaged in eco-friendly materials and never tested on animals. All Skin by Monica products are manufactured in-house in a state-of-the-art current good manufacturing practices and over-the-counter facility in Southern California in small lot batches to ensure freshness and the highest standard for its ingredients.

Skin by Monica currently is outpacing the market with more than 100% growth since the beginning of the year, according to the company, Skin by Monica Olsen. The distribution into the masstige market during a recession has fared well for the Skin by Monica brand, according to its founder, Monica Olsen, a model, actress and mother of two.

"Great quality and a great price is what customers want, and we deliver just that," Olsen said. "Now you can get a department store brand at your local drug store. Why not? This is how it should be, and I am glad to make a brand that is approachable and accessible to all and at the same time deliver the best quality possible."

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NPD: Lip color gets its groove back

BY Antoinette Alexander

PORT WASHINGTON, N.Y. — The total prestige lip segment rose 7% to $185.2 million in U.S. department stores, with the shining star being lip color, according to beauty market research conducted by NPD.

NPD reported that year-to-date, January through April 2011, the total prestige lip segment — which includes lip color, lip liner, lip gloss and lip applicators — rose 7% to $185.2 million in U.S. department stores and 4% in units to 9.8 million. Lip color took center stage with an increase of 11% in dollars ($92.1 million), compared with January through April 2010.

After almost a decade of declining sales, lip color began to show growth again last year. Since February 2010, lip color has experienced 15 months of steady dollar growth, with seven of those months posting double-digit increases, including April 2011 (up 30%). Annual 2010 results were the first time since 2002 that lip color saw a unit increase, 8%, the highest increase since 1998.

"What is particularly noteworthy of the trend in lip color is that we are seeing these significant increases in sales at a time when overall usage of lip color appeared to be dropping off. Coming out of the recession, it seems that the consumers’ thirst for color and play was reawakened," stated Karen Grant, VP and senior global industry analyst for NPD. "In 2010, we saw the preference for rich, as well as retro colors, and in 2011 we are seeing new neutrals come to the fore. As the fashion industry increasingly features bold, as well as understated, lip statements on the runway and in advertisements, lip color appears to be getting its groove back."

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