Ulta Beauty’s winning quarter

Ulta Beauty
Ulta Beauty is on track to open a handful of high-profile stores this year.

Ulta Beauty kicked off the first quarter of the year super strong out of the gate, with comp sales up 14.3% on top of a 15.2% rise the same quarter in 2016. Mary Dillon, CEO of Ulta Beauty, attributes this 29% two-year growth to strong traffic and sales in store and booming e-commerce.

“We’re particularly proud of these results in light of the challenging environment many retailers are experiencing. Our differentiated increasing compelling assortment, the experience and nature of our stores, the strength of our loyalty program and CRM capabilities that help us drive traffic and mange promotional activity with greater precision. The supply chain investment we’ve made to support the acceleration of our e-commerce channel. All of these assets are contributing to our exceptional growth,” Dillon said during a quarterly conference call.

Specifically looking at the e-commerce business, the Ulta.com team delivered growth of 70.9% in the first quarter, the highest quarterly growth rate for e-commerce since the first quarter of 2014 back when the base was only $17 million.

“As we study our guest purchase behavior, our e-commerce business has proven to be largely incremental. The Ulta rewards member who shops online is also increasing their purchases in bricks and mortar versus shifting their purchases online. We continue to improve our site experience and fulfillment capabilities. Ulta.com drove very strong growth during 21 Days of Beauty and other events, including the limited time offers we called Beauty Bets and Beauty Break and special offers for platinum loyalty members,” Dillon said

Part of the beauty dealer’s growth is attributed to its strong loyalty program, which earned the company 1.1 million net new members, bringing the total to 24.5 active members, a 26% year-over-year growth. 

During the quarter, the retailer launched about 600 MAC SKUs online just a few weeks ago and the brand is off to a very strong start on the website. In addition, the salon business grew 16.7%, with strength in color services, laurels and makeup services.

Expanding both digital and physical, Ulta Beauty is on track to open a handful of high-profile stores this year, including a store on Michigan Avenue in Chicago, the retailer's first store in Manhattan and a store in the Mall of America.