Shares in Ulta Beauty soared 20 percent Friday morning after the Bolingbook-based cosmetics retail reported second-quarter net income jumped 35 percent, handily beating Wall Street’s expectations.
The company also announced a five-year strategic plan that includes opening about 100 stores annually.
Ulta CEO Mary Dillon, who assumed the helm of the beauty products retailer last year, credited the “excellent” results to better traffic, successful new product and brand launches and rapid e-commerce growth, and raised the company’s outlook for the year.
Net income for the quarter ended August 2 grew to $60.8 million, or 94 cents per share. Wall Street analysts had been expecting net income of $53.2 million and earnings of 83 cents per share.
Sales at stores open at least 14 months increased 9.6 percent, exceeding analyst expectations by more than three percentage points. That figure includes e-commerce sales, which grew 55 percent. Sales at established stores are a key measure of retailer health because they exclude a boost from newly opened locations.
Revenue rose 22.2 percent to $734.2 million from $601 million for the same period last year, also beating analyst forecasts.
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Ulta now expects to achieve sales and earnings per share in the 20 percent range this year, up from its prior stated expectation of the mid-teens, “reflecting our confidence in continued strong market share gains,” Dillon said.
Ulta, which ended the quarter with 715 stores, also said in the next five years it aims to: open 100 new stores annually, deliver annual comparable store sales growth of 5 to 7 percent and grow e-commerce to represent 10 percent of all sales.
Investments in Ulta’s supply chain are expected to reduce 2015 and 2016 earnings growth rates, the company said.