Ulta Beauty, a cosmetics retailer based in Bolingbrook, Illinois, faced a significant decline in net sales during the second quarter of 2020 due to the disruptions caused by the Covid-19 pandemic. Despite this setback, the company managed to surpass analysts’ expectations by reporting a higher quarterly profit.

For the period ending on August 3, 2020, Ulta Beauty generated $1.23 billion in sales, a decrease from $1.7 billion during the same period the previous year. However, the company experienced a remarkable 200% increase in e-commerce sales, although it was not enough to compensate for the loss of revenue from physical stores. Comparable sales for the quarter declined by 26.7%, with transactions dropping by 36.2%. On the positive side, the average purchase amount increased by 14.9%.

Ulta Beauty’s net earnings for the quarter amounted to $8.1 million, or $0.14 per diluted share, compared to $161.3 million, or $2.76 per diluted share, in the same period in 2019. Adjusted earnings per share were reported at $0.73. Analysts had predicted an adjusted profit of $0.06 per share on sales of $1.25 billion.

In the first half of fiscal 2020, Ulta Beauty recorded a 29.6% decrease in net sales, amounting to $2.4 billion compared to $3.4 billion achieved in the same period the previous year. Comparable sales during this period also declined by 31.1%, with transactions experiencing a 37.4% decrease, while the average purchase amount increased by 10.1%. The company reported a net loss of $70.5 million, or $1.25 per diluted share, in the first half, compared to a net income of $353.5 million, or $6.02 per diluted share, in the same period in 2019.

Despite the ongoing impact of the pandemic on the company’s business, Ulta Beauty’s CEO, Mary Dillon, remains optimistic. She highlighted improving trends and expressed excitement about the long-term opportunities for the company.

Looking forward, Ulta Beauty has not provided financial guidance for fiscal 2020. However, the company expects to incur expenses of $35 million to $40 million in personal protective equipment (PPE) and Covid-19-related costs in the second half of the year. Additionally, Ulta Beauty plans to open 30 new stores in fiscal 2020, following the permanent closure of 19 brick-and-mortar locations in the second quarter.

Following the announcement of Ulta Beauty’s second-quarter results, the company’s stock rose by more than 16% in the extended trading session.

Useful links: Ulta Beauty official website, Ulta Beauty stock information