ULTA Beauty's Hair-Salon Business Keeps On Growing

Every ULTA Beauty store has a hair salon in it—and that core-service part of the nationwide beauty-retail chain's business continues to post impressive increases.

In ULTA Beauty's financial results for its third quarter of fiscal 2015 (the 13-week period that ended Oct. 31) announced Dec. 3, salon sales increased 20% to $51.7 million—compared to $43.1 million in its third quarter of fiscal 2014.

In ULTA Beauty's financial results for its first nine months of fiscal 2015 (the 39-week period that ended Oct. 31) announced Dec. 3, salon sales increased 20.1% to $154.7 million—compared to $128.8 million in its first nine months of fiscal 2014.

"Our salon business comped 10.9%—an acceleration, compared to the first half of the year," ULTA Beauty CEO Mary Dillon said in her opening remarks to analysts in the company's third-quarter fiscal 2015 earnings call Dec. 3. "This momentum was driven by a balance of traffic and ticket increases. Transaction growth reflected strong new-guest acquisition complementing solid growth from existing guests."

Dillon also stated about services for ULTA Beauty's three core areas of hair, skin health and brows during its third quarter of fiscal 2015:

  • Online booking generated 22,000 appointments per month—with about 67% of them from new guests.
  • An increase in the average ticket was due "to more targeted discounts and growth in add-on services like conditioning and hair treatment."
  • The strongest haircare services were hair color, blowouts and hair treatments.

[Image courtesy of ULTA Beauty]

[Earnings-call transcript by Seeking Alpha used]