Ulta Salon, Cosmetics & Fragrance, Inc. announced financial results for the thirteen-week period ("Third Quarter") and thirty-nine-week period ("First Nine Months") ended October 31, 2009, which compare to the same periods ended November 1, 2008.
For the Third Quarter:
•Net sales increased 11.5% to $284.0 million from $254.8 million in the third quarter of fiscal 2008;
•Comparable store sales (sales for stores open at least 14 months) increased 1.5% compared to an increase of 2.0% in the third quarter of fiscal 2008;
•Pre-opening expenses decreased $2.5 million to $2.2 million in the third quarter fiscal 2009 due to the planned decrease in the Company's new store program;
•Operating income increased 52.9% to $14.7 million compared to $9.6 million in the third quarter of fiscal 2008;
•Net income increased 68.6% to $8.5 million compared to $5.0 million in the third quarter of fiscal 2008;
•Income per diluted share increased to $0.14, compared to $0.09 in the third quarter of fiscal 2008.
Lyn Kirby, Ulta's President and Chief Executive Officer, stated: "We are pleased to continue our positive momentum from the first half of the year and report better-than-expected third quarter sales, earnings and cash flow. Our positive third quarter performance included a 1.5% increase in comparable store sales, a 40 basis point expansion in merchandise margin and leverage in marketing expense while delivering a comparable marketing event program to last year. Our strong third quarter performance has helped us deliver over $65 million of free cash flow year to-date which was well ahead of our expectations. In addition, our 2009 new stores continue to perform on model, which helped to drive a double digit total sales increase."
"As we begin the fourth quarter, we believe we are well positioned. We plan to continue to apply the successful strategies that we believe led to our strong third quarter and year to date results," Ms. Kirby continued. "Because we expect the holiday season to be challenging, we have developed a very dynamic marketing and merchandising program with several new and exciting first-ever strategies to drive the top line. At the same time, and similar to our third quarter performance, we expect our strategies to lead to expansion in merchandise margin, greater efficiencies in marketing and a reduction in expenses driven by our cost savings program. We believe our top and bottom line initiatives will enable us to continue to navigate the difficult economic environment and deliver a solid fourth quarter performance at Ulta," Ms. Kirby concluded.
For the First Nine Months:
•Net sales increased 11.2% to $826.4 million from $743.3 million in the first nine months of fiscal 2008;
•Comparable store sales (sales for stores open at least 14 months) decreased 0.8% compared to an increase of 3.2% in the first nine months of fiscal 2008;
•Pre-opening expenses decreased $7.1 million to $5.4 million in the first nine months of fiscal 2009 due to the planned decrease in the Company's new store program;
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