The specialty retailer reported strong Q2 sales and raised its full-year guidance, though makeup comps were nearly flat compared to last year.

Ulta Beauty posted strong second quarter earnings, raised its guidance and brushed off increased competition from former retail partner Target.

“What I would say is that beauty has always been a competitive category,” Ulta CEO Kecia Steelman said on an earnings call Thursday when an analyst noted Target’s new Beauty Studio concept. “We expect the battle for share to remain intense. Our job isn't to chase competitors. It's to really lean into what differentiates Ulta Beauty and execute it even better.”

An important part of that differentiation is providing exclusive merchandise, the executive said, adding that Ulta’s guidance has also built in the option to remain promotional as needed in such a competitive environment.

The beauty retailer’s Q2 net sales increased nearly 9% year over year to $3 billion, with comps growing 3.8%.

Ulta raised its full-year guidance, now expecting net sales growth of 6.7% to 7.2% and comps growth of 3.2% to 3.7%. That compares to previous projections of net sales growth of 6% to 7% and comps growth of 2.5% to 3.5%.

Analysts, however, called out the somewhat softer guidance for the second half of the year.

“Ulta delivered another top and bottom line beat and raised the full year guidance across all key metrics,” William Blair analysts said in an emailed note Friday.

Source link