New brands and product innovation are driving growth at Ulta Beauty.
The cosmetics and skincare retailer said in a Thursday (Dec. 1) press release that during its third quarter that ended Oct. 29, its net sales increased 17.2% year over year and its comparable sales were up 14.6%.
The company attributed these gains to the resilience of the beauty category, retail price increases and the impact of new brands and product innovation over the last year.
“Although pricing contributed more to our comp than last quarter, the majority of our third quarter comp was fueled by growth from our core assortment and newness,” Ulta Beauty CEO Dave Kimbell said Thursday during the company’s quarterly earnings call.
The company’s new products include 15 newly certified brands in its Conscious Beauty line, which includes “products that are good for the world,” four new brands in its BIPOC (Black, Indigenous and people of color) assortment and an expanded offering of wellness products, Kimbell said.
“Historically, sales of new products have averaged 20% to 30% of our sales, and our overall mix of newness this year has been in line with our historical experience,” Kimbell said during the call.
To help shoppers discover these new products, Ulta Beauty rolled out a new layout in about a dozen stores during the quarter. This is designed to better showcase the company’s product categories, improve navigation, enhance the service experience and promote discovery, Kimbell said.
In addition, elevated displays showcase key items, new beauty bars offer brow and makeup services, and dedicated space at the front of the store features newly launched brands and products.
“All products grew by category with delineated fixtures and visuals and a flow from prestige to masstige to mass,” Kimbell said.
Based on the third quarter results, Ulta Beauty upped its outlook for fiscal 2022 for both net sales and comparable sales, according to the press release.
“Our third quarter results reflect the sustained resilience of the beauty category and the strong emotional connection and loyalty we have cultivated with our guests,” Kimbell said in the release. “I am confident our business model, which offers unmatched breadth, value and convenience, is even more relevant today and unlocks opportunities to further delight guests as we continue to lead the beauty category.”
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