E-commerce accounts for a growing share of Ulta Beauty’s sales, and online sales surged by more than 70% year over year for the second straight quarter.
Ulta, No. 119 in the Internet Retailer 2017 Top 500, reported online sales of $96.3 million in the fiscal second quarter ended July 29, up 72.3% from $55.9 million in the year-ago quarter. Online accounted for 7.5% of overall sales during the quarter, compared to 5.2% last year.
For the first six months of fiscal 2017, Ulta reported online sales of $200.6 million, up 71.6% from $116.9 million during the same time last year. Online has accounted for 7.7% of Ulta’s total sales so far this fiscal year, compared with 5.5% at this point last year.
According to Top500Guide.com, Ulta has posted a 41.60% five-year compound annual growth rate in online sales, the eighth-fastest growth among the 152 retail chains ranked in the Top 500.
“E-commerce sales were driven by transaction growth,” CEO Mary Dillon told analysts on the Q2 call, according to a transcript from Seeking Alpha. “[We want to] maintain a great momentum we’ve seen for the past two quarters as we enhance the process assortment and content, improve the shopping experience and shorten the time to fill orders.”
Total web traffic increased 73% year over year and mobile traffic jumped 104%, Dillon said. She attributed those increases to the company’s paid social advertising campaigns and other digital marketing initiatives.
Dillon said to better marry the online and offline shopping experience, Ulta is testing a feature called store-to-door in 40 stores. The feature allows shoppers to order online while they are in store if a product they are looking for isn’t available in that store.
“The integration of physical, digital and mobile is really central to our strategy,” chief financial officer Scott Settersten told analysts.
For the fiscal second quarter ended July 29, Ulta reported:
- Net sales of $1.290 billion, up 20.7% from $1.069 billion during the same time last year.
- A comparable sales gain, including e-commerce, of 11.7%, compared with 14.4%.
- Net income of $114.2 million, up 26.9% from $90.0 million.
For the first six months of fiscal 2017, Ulta reported:
- Net sales of $2.605 billion, up 21.6% from $2.143 billion during the same time last year.
- A comparable sales gain, including e-commerce, of 13.0%, compared with 14.8%.
- Net income of $242.4 million, up 33.2% from $182.0 million.