Ulta Beauty benefited from a beauty category that has shown resilience throughout the year as … [+]
Courtesy of Ulta Beauty
sales were up 17.2% for the third quarter (Q3) and 18.3% year to date. The company posted a profit increase of 27.5% for Q3, adding to its already strong performance in 2022. Total profits for Ulta Beauty for the nine months ending October 29, 2022, were up 29.5%. “Amidst a challenging macro environment, the Ulta Beauty team delivered yet another outstanding quarter, with strong top and bottom-line results and growth across all major categories and channels,” said Dave Kimbell, chief executive officer, on the earnings call.
Beauty category and brand loyalty remain strong
The company benefited from a beauty category that has shown resilience throughout the year as consumers have continued to spend and are focused on wellness. New brands and product innovations continue to drive interest in the Ulta Beauty assortment. “Holiday season is in full swing, and with Ulta Beauty’s assortment and marketing initiatives, the company is positioned to deliver another robust holiday season,” stated Kimbell.
Ulta Beauty’s loyalty members are emotionally connected to the brand and highly engaged. “Loyalty members have a higher frequency of shopping visits and spend more money,” said Kimbell. Q3 ended with 9% more loyalty members than at the same time last year. “We had record-breaking loyalty members reaching 39 million as we continue to curate all things beauty for a deeply engaged customer base,” commented Kimbell. While it remains to be seen if consumers are trading down during this challenging economic environment, the wide range of products at a variety of price points allows the company to serve the needs of many demographics and income levels.
Contributors to the strong performance include store design and display changes, holiday stock arriving early, and key categories that drove demand. “Skincare is one of the fastest-growing categories as consumers continue to invest in taking care of their skin,” stated Kimbell. The company added a Skincare We Love Wall in stores which showcased key products and brands that performed well and resonated with customers. Also noted were holiday fragrance gift sets available early in the holiday season. The make-up category had double-digit comp growth driven by the intense marketing events during the quarter, including 21 Days of Beauty and Fall Haul. New products across make-up created a fresh assortment that resonated with …….