Ulta Beauty's Q1 sales surged 65%, with a gratifying growth

Recently, Ulta Beauty, the largest beauty retailer in the United States , released its financial report for the first quarter of 2021. Data showed that its Q1 sales soared 65.2%, of which net sales this quarter were US$1.9 billion.

According to Ulta Beauty, its net sales growth was mainly due to increased confidence among U.S. consumers, government stimulus measures and the relaxation of restrictions due to the COVID-19 pandemic, and its transaction volume increased by 53%. It started the year with a good start, with sales and earnings exceeding the first quarter levels of 2020 and 2019.

There are many reasons for Ulta Beauty's success. Gross profit in the first quarter increased 148% over the previous year due to increased sales, leverage on fixed costs, improved merchandise margins, lower salon expenses, and a favorable channel mix shift.

Among them, skin care, hair care, fragrance and bath products are all higher than last year, while the cosmetics (makeup) category has seen a decline in spending. Interactions on social media platforms such as TikTok are bringing new vitality to the makeup category, attracting younger audiences, driving trends and revitalizing trial and use.

Salon services accounted for 4% of total net sales in 2020, falling to 3% in the first quarter of this year. Salon services had been declining before the pandemic , accounting for 5% of total sales in 2019, down from 6% in 2018.

After posting a net loss in 2020 due to many store closures throughout the pandemic , first quarter 2021 was 20% above 2019 levels, a sharp recovery from last year. Online orders for pickup in store (BOPIS) increased to about 16% of total e-commerce sales this quarter, up from about 4% last year.

According to Ulta Beauty, which now offers more than 25,000 beauty products from 500 suppliers, including its own brands, its stores have struck a chord with a wide variety of shoppers by selling a variety of products and price points.

In addition, Ulta's Ultimate Rewards membership of over 32 million continues to grow, and the brand has a good chance of surpassing Target's 75 million, showing huge potential for development.

USA

Ulta Beauty

First quarter