Online sales are up nearly 70% at Ulta Beauty through the first nine months of the year, and it’s costing the cosmetics retailer less to fulfill those online orders.
Ulta, No. 119 in the Internet Retailer 2017 Top 500, reported online sales of $119.8 million during the fiscal third quarter ended Oct. 28, up 62.8% from $73.6 million during the same time last year. Online accounted for 8.9% of sales during the quarter, compared with 6.5% last year.
For the first nine months of fiscal 2017, Ulta reported online sales of $320.4 million, up 68.2% from $190.5 million during the same time last year. Online has accounted for 8.1% of Ulta’s sales so far, compared with 5.8% last year.
Improvements in Ulta’s supply chain have led to a 10% reduction in the amount Ulta spends fulfilling each online order, CEO Mary Dillon told analysts Thursday on the retailer’s earnings call. During the quarter, Ulta expanded what it calls its store-to-door offering to all of its stores from the 40 stores where it had been testing the service. The program allows in-store shoppers to place online orders for products that aren’t in stock in that store, and those items will be delivered at no charge to a customer.
“We rolled out this capability chainwide at the end of the third quarter, and while this initiative is still fairly small in terms of demand, it’s proving quite useful and satisfying guests looking for hot brands that are not available in every store, such as MAC or Morphe,” Dillon said, according to a transcript from Seeking Alpha.
Ulta also relaunched its mobile site during the third quarter, which contributed to year-over-year mobile traffic gains of 92%, she said. Overall traffic to its website rose 57% across all devices combined during the quarter.
- Net sales of $1.342 billion, up 18.7% from $1.131 billion in Q3 2016.
- A comparable sales gain, including e-commerce, of 10.3%, compared with 16.7%.
- Net income of $104.6 million, up 19.4% from $87.6 million.
For the first nine months of 2017, Ulta reported:
- Net sales of $3.945 billion, up 20.5% from $3.274 billion during the same time last year.
- A comparable sales gain, including e-commerce, of 12.1%, compared with 15.4%.
- Net income of $347.1 million, up 28.8% from $269.5 million.