Ulta Beauty Inc. raised its sales outlook after second quarter results topped expectations, reinforcing that cosmetics demand is on the rise amid easing pandemic restrictions.
The retail chain now sees sales of as much as $8.3 billion this year, Ulta said Wednesday, up from a previous forecast of no more than $7.8 billion. The company also said the key gauge of same-store sales will rise as much as 32 percent, versus a previous projection of 23 percent to 25 percent.
“We feel very confident in the path ahead,” chief executive officer Dave Kimbell said in an interview. The beauty industry is “healthy and recovering at a pace faster than we anticipated.”
Ulta’s performance underscores the rapid recovery of the industry as the pandemic wanes. On top of a rosier outlook, second quarter revenue surpassed what it reported in the same period in 2019, before the Covid-19 pandemic upended economic activity.
Profit of $4.56 a share in the quarter topped Wall Street estimates compiled by Bloomberg.
As demand rises, Ulta is quickening its retail expansion. The Bolingbrook, Illinois-based company will open 44 new stores by the end of its fiscal year, up from a previous plan to open 40.
While profit margins are expected to expand in 2021, Ulta is currently navigating wage pressures both in-store and in its distribution centres, which could continue into next year.
“There’s no doubt that as we look out into the second half of the year and into 2022 that we’re anticipating and preparing for more cost pressures,” Kimbell said.
By Gerald Porter Jr.
Last year, retailers rolled out pandemic-friendly digital alternatives to in-store makeup samples. But consumers rebelled.