E-commerce sales grow 56% in 2014 for Ulta

March 18, 2015 11:44 AM

Higher customer engagement online helped contribute to a 56.4% year-over-year gain in e-commerce sales in fiscal 2014 for Ulta Salon, Cosmetics, & Fragrance.

2014 was a good year on the whole for Ulta Salon, Cosmetics & Fragrance Inc. as web and total sales and income all grew. The web now accounts for 4.6% of total sales as the beauty supplies retailer marches toward its goal of deriving 10% of all sales from e-commerce by 2019.

“We believe's impressive growth was primarily the result of higher customer engagement, driven by more relevant content and offers,” Ulta CEO Mary Dillon told analysts on the company’s year-end earnings call last week, according to a transcript of the call obtained from Seeking Alpha. “This was evidenced by higher open, click and conversion rates for our promotional emails, which drove sales productivity far above the increase in the number of emails we sent.”

For the 2014 fiscal year ended Feb. 1, Ulta, No. 227 in the Internet Retailer 2014 Top 500 Guide, reported:

  • E-commerce sales were $149.1 million, up 56.4% from $95.3 million in fiscal 2013.
  • Total sales of $3.2414 billion, up by 21.4% from $2.6706 billion.
  • Comparable-store sales, including e-commerce, grew 9.9%.
  • Net income of $257.1 million, an increase of 26.8% from $202.8 million in the same period last year.

Ulta continues to upgrade its fulfillment operations, with a new distribution center in Greenwood, Ind., scheduled to open in the third quarter, Dillon told analysts. The facility is “designed to ramp up to provide capacity for more than 100 stores and significant e-commerce volume by next holiday season,” she said. A Southwest distribution center will be located in the Dallas area market, aiming for opening in the second half of 2016. 

For the fourth quarter Ulta reported:

  • Online sales grew by 55.2%. Based on previous earnings reports, e-commerce sales for the quarter were about $39.6 million. Ulta did not report Q4 2013 web sales.
  • Total sales of $1.0476 billion, up by 20.7% from $868.1 million in the same quarter last year.
  • Comparable-store sales, which include e-commerce, increased 11.1%.
  • Net income of $87.3 million, up by 23.5% from net income of $70.7 million in Q4 2013.

Dillon also announced on the earnings call that chief merchandising officer Janet Taake will retire as of May 1, after six years at Ulta. The change resulted in Ulta integrating its merchandising and marketing functions under one leader, Dillon said. Dave Kimbell, previously chief marketing officer, will also head up merchandising, in addition to his current oversight of marketing, CRM, loyalty, and e-commerce. Kimbell will become chief merchandising and marketing officer.




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