Ulta’s online sales surge nearly 40% in Q1

May 31, 2016 04:00 PM

Online sales continue to shine for cosmetics retail chain Ulta Beauty.

In its Q1 2016 earnings report, Ulta, No. 153 in the Internet Retailer 2016 Top 500 Guide, reported online sales of $61.0 million, up 38.6% from $44.0 million last year. Online sales accounted for 5.7% of overall sales during the quarter, compared to 5.1% during the same period last year. Average order value didn’t increase noticeably, and executives attributed that overall online sales growth to a spike in online traffic, something Ulta executives attributed to a successful Mother’s Day social media campaign.

CEO Mary Dillon told l analysts on Ulta’s quarterly call that omnichannel shoppers, who shop Ulta in-store and online, are significantly more valuable to the retailer than those who shop only one or the other. “We love that guest because they are really our best guest in many ways,” she said, according to a transcript from Seeking Alpha. “The person who is shopping both in-store and online is driving two and a half times the sales than somebody who’s only shopping in the store.”

Omnichannel shoppers who come to Ulta first via e-commerce quickly move into shopping in stores, “and that's what we would like to see,” added chief merchandising and marketing officer Dave Kimbell.

Mobile increasingly contributes to the retailer’s online success. Dillon told analysts Ulta released an updated version of its app on Apple and Android devices during the quarter.

“Both app versions have been a big hit with users, garnering enthusiastic user reviews and an increase in downloads now reaching well over 2 million between the two,” Dillon said.

Meanwhile, shoppers on mobile devices account for more than 60% of overall e-commerce traffic, though she declined to say what percentage of online sales those shoppers account for.

For the fiscal first quarter ended April 30, Ulta reported:

  • Total sales of $1.074 billion, up 23.7% from $868.1 million last year.
  • Net income of $92.0 million, up 37.5% from $66.9 million.
  • A comparable sales gain including e-commerce of 15.2%, compared to 11.4%.



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