- Net Sales Growth Surpassed $2.9B (+12.9% YoY) with 6.3% Comparable Sales Increase
- EPS Held Steady at $5.14 per Share, Despite 23.3% SG&A Growth to $841M
- Loyalty Program Expansion Reached 46.3 Million Members (+4% YoY)
- E-Commerce Strength Drove Mid-Teen Growth, Contributing to 6.3% Comp Sales Rise
- Strategic Investments Added 35+ New Brands and 120+ Brands via UB Marketplace Launch
Segment Performance
The company saw comparable sales growth of 6.3%, with positive comps across all categories and channels, and notable double-digit strength in e-commerce. All major categories exceeded expectations and delivered positive comp growth, with fragrance being the strongest growing category, delivering double-digit comp sales growth. The company's e-commerce sales grew in the mid-teen range, with digital channels contributing to comp growth.
Strategic Initiatives
The company launched over 35 new brands during the quarter, many of which were exclusive, and debuted its new brand equity campaign, "beauty happens here." Ulta Beauty also expanded its international presence, opening seven stores in Mexico and one store in Kuwait. The company successfully launched UB Marketplace in the third quarter, adding over 120 brands and 3,500 SKUs to its online assortment.
Guidance and Outlook
The company updated its outlook for the year, expecting net sales of approximately $12.3 billion, with comp sales growth between 4.4% and 4.7%, and operating margin between 12.3% and 12.4% of net sales. For Q4, the company expects comp growth between 2.5% and 3.5%, operating margin between 12% and 12.3%, and EPS between $7.61 and $7.90. The company is confident in its plans and improvements made, and its teams are ready to drive excitement and deliver for guests and their loved ones.
Valuation
With a P/E Ratio of 22.61 and an expected revenue growth rate of 8.9% next year, the stock appears to be reasonably valued. The company's ROE of 46.87% and ROIC of 22.5% indicate strong profitability. As Kecia Steelman, the new CFO, mentioned, "We're being prudent with our guidance to ensure an achievable plan... I believe we can sustain momentum." The company's strong fundamentals and growth prospects make it an attractive investment opportunity.