Ulta Beauty Inc (NASDAQ:ULTA) shares moved higher afterhours as the beauty retailer posted stronger-than-expected fiscal second quarter results, with revenue rising 9.3% year-over-year to $2.79 billion, above Wall Street forecasts of about $2.65 billion.
The increase in sales was fueled by higher comparable sales, the acquisition of Space NK, and contributions from new store openings.
Comparable sales, which include stores open at least 14 months and eCommerce, rose 6.7% after a 1.2% decline last year, driven by a 3.7% increase in transactions and a 2.9% increase in average ticket.
Gross profit climbed 11.6% to $1.1 billion, with margins improving to 39.2% from 38.3%, helped by lower inventory shrink and stronger merchandise margins.
Operating income reached $344.9 million, or 12.4% of net sales, compared to $329.2 million, or 12.9% of sales, in the prior year period.
Selling, general and administrative expenses rose 15% to $741.7 million, reflecting higher incentive compensation, payroll, and corporate overhead.
Net income was $260.9 million, up from $252.6 million last year, while diluted earnings per share rose 9.1% to $5.78 from $5.30, including a small benefit from tax accounting on stock-based compensation.
For the first half of fiscal 2025, Ulta reported sales of $5.64 billion, up from $5.28 billion a year earlier, with comparable sales increasing 4.7%.
“The Ulta Beauty team delivered strong results in the second quarter, including 6.7% comparable sales growth,” Ulta CEO Kecia Steelman said in a statement. “Outstanding top line performance, fueled by growth across all major categories, drove market share growth and better-than-expected profitability.”
Shares of Ulta added 4.6% at about $555 post-earnings.