Comparable store sales up at ULTA Salon Cosmetics

05 Sep '08

6 min read

Ulta Salon, Cosmetics & Fragrance Incannounced financial results for the thirteen-week period and twenty-six-week period (First Six Months) ended August 2, 2008, which compare to the same periods ended August 4, 2007.

For the Second Quarter:
• Net sales increased 24.3% to $249.1 million from $200.4 million in the second quarter of fiscal 2007;

• Comparable store sales (sales for stores open at least 14 months) increased 3.7%, compared to an increase of 6.5% in the second quarter of fiscal 2007;

• Gross profit increased 23.9% to $73.1 million, or 29.4% of net sales, from $59.0 million, or 29.4% of net sales in the second quarter of fiscal 2007;

• Operating income increased 46.2% to $7.2 million, which includes incremental pre-opening expenses of $1.2 million. This compares to operating income of $4.9 million in the second quarter of fiscal 2007;

• Net income increased 67.2% to $3.7 million, compared to $2.2 million in the second quarter of fiscal 2007;

• Income per diluted share was $0.06, compared to a loss per diluted share of $0.23 in the second quarter of fiscal 2007; and

Adjusted income per diluted share was $0.06, compared to adjusted income per diluted share of $0.04 in the second quarter of fiscal 2007. Adjusted income per diluted share excludes the effects of preferred stock dividends and equalizes the dilutive effects of the preferred shares and IPO shares for the period. See Exhibit 4 for a complete description of adjusted income per basic and diluted share and reconciliation to the GAAP equivalents.

Lyn Kirby, Ulta's President and Chief Executive Officer, stated: "Our compelling shopping experience driven by our ability to satisfy all the beauty needs of women across all categories, including full-service salon, led to another solid performance for Ulta. Despite the difficult economy, we increased sales by 24.3%, delivered a 3.7% comparable store sales increase and opened 18 new stores during the quarter.

We continue to deliver increases in customer traffic and average ticket which reinforces our ability to deliver growth with our diversified portfolio of over 500 brands across prestige and mass categories with price points that fit any wallet.

The 3.7% comparable store increase was achieved without additional investment in margin, inventory, or advertising. In addition, our corporate infrastructure began to deliver increased leverage during the quarter, as we reported a 70 basis point improvement in SG&A, as a percentage of sales. We attribute our ongoing success in a difficult economy to our proven marketing strategy, solid operational execution and the beauty category, which is more resilient than many retail categories. We remain confident that we are positioned to achieve our annual goals."

For the First Six Months:
• Net sales increased 23.8% to $488.4 million from $394.6 million in the first six months of fiscal 2007;

• Comparable store sales (sales for stores open at least 14 months) increased 3.8%, compared to an increase of 7.8% in the first six months of fiscal 2007;

• Gross profit increased 24.1% to $147.1 million, or 30.1% of net sales, from $118.5 million, or 30.0% of net sales in the first six months of fiscal 2007;

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