Ulta Beauty Maintains Strong Appeal Among Consumers, Q3 Earnings Show

Words by Retail Bum

Ulta Beauty's Offerings Maintain Strong Appeal Among Consumers
Ulta Beauty's Offerings Maintain Strong Appeal Among Consumers

Ulta Beauty reported a strong showing for the third quarter of 2023 that ended October 28, 2023, thanks to its knack for delivering valued offerings, resulting in a surge in traffic, both in brick-and-mortar stores and online.

In the third quarter of 2023, Ulta Beauty demonstrated a noteworthy performance, as net sales soared to $2,488.9 million, marking a 6.4% increase from the previous year’s $2,333.8 million. During this period, comparable sales experienced a 4.5% rise, in contrast to the prior year’s more substantial increase of 14.6%. The gross profit also increased, reaching $992.1 million, a 3% increase from the previous $962.8 million.

Ulta Beauty reported an operating income of $327.2 million, constituting 13.1% of net sales, compared to the previous year’s figure of 15.5%. Conversely, net income declined from $274.6 million to $249.5 million.

Ulta’s diluted earnings per share for the quarter were $5.07, slightly down from the previous figure of $5.34.

“Our insights suggest that consumers are ready to celebrate even as they navigate in an uncertain economic environment,” said CEO Dave Kimbell in a conference call with investors on Thursday, November 30, 2023.

That said, Kimbell also pointed to the likelihood of higher promotional activity within the beauty category this holiday season.

The announcement comes on the heels of a recent interview conducted by Retail Bum with Robina Verbeek, co-CEO and co-founder of SOS, which has teamed up with Ulta Beauty to revitalize its in-store experience with high-tech sampling kiosks. In the interview, Verbeek delved into the company’s mission to eliminate the widespread distribution of impersonal samples, opting to replace the outdated approach with a modern strategy centered around utilizing retail media technology.

During the conversation, Verbeek highlighted how SOS’s collaboration with the beauty retailer is helping promote responsible consumer behavior within Ulta Beauty stores. According to Verbeek, preliminary data already indicates promising engagement and usage of SOS devices as the company’s kiosks provide consumers with an interactive experience and offer brands a more direct channel to connect with their audience.

Unlike tired tactics like handing out samples or distributing flyers, often overlooked or unused, SOS presents an efficient and engaging way for Ulta Beauty and its portfolio of brands to forge connections with consumers.

SOS kiosks are situated in various Ulta Beauty stores across ten strategically selected cities in states such as New York, Massachusetts, Florida, California, and Texas. The kiosks aim to revolutionize the sampling experience, catering to Ultamate Rewards members and encouraging new member sign-ups. Members can claim a complimentary sample every week from a selection of travel-sized products in cosmetics, skincare, and haircare from well-known brands.

For Ultamate Rewards members, accessing these free samples is as simple as providing their phone number or email to link to their existing account. Simultaneously, non-member guests can conveniently register and create their Ultamate Rewards account at the SOS machine to take advantage of this opportunity.

Read more: How Ulta Beauty Is Tackling The Beauty Sampling Waste Problem

 

 

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