Despite challenges facing the cosmetics category, Ulta Beauty delivered net sales and comparable sales growth in the third quarter.
Net sales in the third quarter ended November 2 increased 7.9% to $1.68 billion compared to $1.56 billion in the third quarter of fiscal 2018. Comparable sales (sales for stores open at least 14 months and e-commerce sales) increased 3.2% compared to an increase of 7.8% in the third quarter of fiscal 2018. The comparable sales increase was driven by 2.3% transaction growth and 0.9% growth in average ticket.
Net income in the third quarter was $129.7 million compared to $131.2 million in the third quarter of fiscal 2018. Diluted earnings per share increased 3.2% to $2.25, which included a $0.02 per share benefit primarily due to an increase in federal income tax credits, compared to $2.18 in the third quarter of fiscal 2018, which included a $0.02 per share benefit due to income tax accounting for share-based compensation.
“Our differentiated model is winning in the marketplace,” said Mary Dillon, CEO, Ulta Beauty. “The Ulta Beauty team delivered another quarter of solid top-line performance, gross margin expansion, and EPS growth, despite the current challenges facing the U.S. cosmetics category. We continue to gain market share across all major beauty categories, and we are extending our leadership position by creating stronger connections with our guests and engaging with them in better and more exciting ways.”
The company has updated its fiscal 2019 outlook and now expects to open approximately 80 new stores, execute approximately 20 remodel or relocation projects, and complete approximately 270 store refreshes; increase total sales by approximately 10% (previously between 9% and 12%); achieve comparable sales growth in the range of 4.7% to 5% (previously 4% to 6%); and deliver diluted earnings per share in the range of $11.93 to $12.03 (previously $11.86 to $12.06).