What happened
It has been a banner year for Ulta Beauty (ULTA -2.73%) shareholders, as the stock gained 42% in the first half of 2019 compared to a 17% increase in the S&P 500, according to data provided by S&P Global Market Intelligence.
So what
The spa and beauty products retailer started the year off strong by capitalizing on its painful 2018 inventory clean-out initiatives. Ulta said in mid-March that its fresher merchandising contributed to a robust sales bounce over the holiday season and helped deliver its first increase in profitability in several quarters.
The retailer followed that report up with more good news in late May, announcing that comparable-store sales rose 7% thanks to a mix of higher customer traffic and increased spending per visit.
Image source: Getty Images.
Now what
Executives are predicting more modest sales growth than investors have been used to seeing from Ulta in recent years due to slowing gains in the online sales channel. The double-digit customer traffic spikes that occurred in 2015 and 2016 appear to be behind the retailer as well.
However, Ulta still seems to be gaining market share in the makeup industry. And CEO Mary Dillon and her team also have their sights set on international expansion. The experience that management accumulates over the next few quarters in Canada will inform its strategy in pushing into other markets outside of the United States in the years to come.
