Ulta to enter Mexico; to open 60 to 65 U.S. stores on heels of strong Q4
Ulta Beauty, which reported better-than-expected fourth-quarter earnings and revenue, is planning to make its international debut.
The beauty giant has entered into a joint venture with global brands operator Axo to launch and operate Ulta in Mexico in 2025.
“International expansion represents an incremental, long-term opportunity for Ulta Beauty to extend our reach and leverage our differentiated value proposition,” stated Dave Kimbell, CEO, who described Axo as “a highly experienced operator” of global brands.
On the home front, Ulta plans to open 60 to 65 net stores in 2024, along with 40 to 45 remodels/relocations.
The news about the expansion was included in Ulta’s fourth-quarter earnings release. The retailer’s net income increased 15.7% to $394.4 million, or $8.08 a share, for the quarter ended Feb. 3, compared with $340.8 million, or $6.68 a share, in the year-ago quarter. Analysts had expected earnings per share of $7.53.
Net sales increased 10.2% to $3.55 billion, topping estimates of $3.53 billion, primarily due to increased comparable sales, strong new store performance, strong growth in other revenue, and the benefit of an extra week of sales in fiscal 2023, the company said. (Net sales in the 53rd week were approximately $181.9 million.)
Comparable sales rose 2.5%, driven by a 4.5% increase in transactions and a 1.9% decrease in average ticket.
For the full year, Ulta reported that its net sales increased 9.8% to $11.2 billion. Comparable sales increased 5.7%
“We closed out a strong 2023 with better-than-expected fourth quarter financial performance,” Kimbell stated. “Our compelling holiday plans and thoughtfully curated assortment resonated with our guests and delivered healthy traffic, record brand awareness, and strong member growth.”
With regard to 2024, Kimbell said Ulta is well-positioned to drive strong top and bottom-line growth.
“While we are mindful the near-term macro environment remains dynamic, we are optimistic about the resiliency of the beauty category, energized by the growth opportunities ahead of us, and confident in our ability to deliver for our guests and our shareholders.”
For fiscal 2024, Ulta expects net sales of $11.7 billion to $11.8 billion and earnings per share of $26.20 to $2. Same-store sales are expected to increase 4% to 5%.
During fiscal 2023, the company opened 33 new stores, relocated seven stores, remodeled 18 stores, and closed three stores. It ended the year with 1,385 stores totaling 14.5 million square feet.