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Ulta nearly doubles its online sales in the first half of fiscal 2015

August 28, 2015 02:28 PM
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Beauty supplies retailer Ulta Beauty is sitting pretty through the first half of fiscal 2015.

Ulta, No. 196 in the Internet Retailer 2015 Top 500 Guide, reported online sales of $80.1 million through the first six months of the fiscal year ended Aug. 1, up 47% from $54.5 million during the same time last year. That $25.6 million in growth represents 8.6% of Ulta’s overall sales growth during the first half of the year. E-commerce now accounts for 4.6% of Ulta’s net revenue.

For the second quarter, online sales grew to $36.1 million, up 43.3% from $25.2 million during the same time last year, with the $10.9 million in e-commerce growth representing 7.6% of Ulta’s overall Q2 growth.

Mobile proved to be a driver of online sales growth during the quarter. Chief marketing officer Dave Kimbell told analysts on Ulta’s quarterly earnings call that 25%, or just over $9 million, of online sales during the quarter came from mobile devices.

“We're improving our app pretty significantly and trying to make that shopping experience easier when she's on our mobile website,” he told analysts, according to a transcript from Seeking Alpha. “All of the changes that we're making around trying to increase conversion and increase average order—that we're doing both on the desktop service as well as mobile—are having an impact.”

Earlier this month, Ulta opened a fulfillment center in Greenwood, Ind., aimed at increasing the retailer’s order fulfillment capacity for both web orders and stores. The new fulfillment center is Ulta's largest and will handle up to 45,000 e-commerce orders per day. CEO Mary Dillon told analysts on the call that the company also has revamped its website to give it a more colorful look and increased the number of brands offered online.

Dillon said personalizing its customer interaction has been key to Ulta’s online sales gains.

“By leveraging insights about customer preferences and behaviors, we're able to tailor our communication to be more targeted and more motivating to our guests,” she told analysts on the call. “During the second quarter, sales per email delivered increased significantly year over year as a result of this approach.”

For the second quarter ended Aug. 1, Ulta reported:

  • Net sales of $877.0 million, up 19.4% from $734.2 million during the same time last year.
  • Net income of $74.2 million, up 22.0% from $60.8 million.
  • Comparable-store sales, including e-commerce, up 10.1% compared with 9.6% last year.

For the first six months of fiscal 2015, Ulta reported:

  • Net sales of $1.745 billion, up 20.5% from $1.448 billion during the same time last year.
  • Net income of $141.1 million, up 27.5% from $110.7 million.
  • Comparable-store sales, including e-commerce, up 10.8% year over year compared with 9.2% last year.
 

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