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Ulta Beauty Plans To Open 500 Stores Over The Next Five Years

Ulta Beauty has established a five-year strategic plan that includes a variety of new business goals and initiatives.

Most notably, Ulta plans to open approximately 100 stores per year through 2019. The company reported in its quarterly earnings call that 19 stores were opened in Q2 2014, bringing Ulta’s brick-and-mortar footprint to 715 locations.

Due to more promising results for the quarter, Ulta is aiming to expand its e-Commerce division so it accounts for 10% of total sales. Between Q2 2013 and Q2 2014, the retailer’s e-Commerce sales improved by 54.9%.

In Q2 2014, net income for the retailer also jumped 35.4% to $60.8 million, compared to $44.9 million in Q2 2013. Same-store sales increased 9.6% in the time period, driven by a 5.8% growth in transactions.

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 “A significant improvement in traffic, successful new product and brand launches and rapid e-Commerce growth drove better than expected top line performance,” said Mary Dillon, CEO of Ulta Beauty. “As a result, the Ulta team delivered healthy operating margin expansion in the second quarter. We are raising our outlook for the year and now expect to achieve sales and earnings per share growth in the 20% range, reflecting our confidence in continued strong market share gains.”

The company’s heightened guidance includes an expected same-store sales growth of approximately 8% and a goal to generate more than $100 million in free cash flow. By the end of the fiscal year, the company plans to expand its store square footage by approximately 15% and remodel 12 locations.

Ulta expects Q3 2014 net sales to range between $724 million and $736 million, compared to Q3 2013 net sales of $618.8 million.

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