Ulta Salon (NASDAQ: ULTA) reported Q2 EPS of $0.76, $0.70 better than the analyst estimate of $0.06. Revenue for the quarter came in at $1.2 billion versus the consensus estimate of $1.24 billion.

“We have navigated the disruption and uncertainty of COVID-19 with our associates and guests at the heart of every decision. After closing our stores in the first quarter, we reopened our fleet in the second quarter with Shop Safe Standards and new operating procedures in place to protect the health and safety of all. I remain thankful and proud of our teams for their response and leadership throughout this challenging time and for their grace, agility and commitment to serving our guests,” said Mary Dillon, chief executive officer. “While the pandemic continues to impact our business, we are encouraged by improving trends. Comparable sales trends improved significantly throughout the quarter, from decreasing 37% in early May, as we began reopening stores, to decreasing 10% in July, when most of our stores were re-opened. Notably, sales trends have continued to improve, with comparable sales down in the mid-single digit range for the first three weeks of August.”

“We believe the near-term operating environment will continue to be dynamic and challenging, but I remain optimistic and excited about the long-term opportunity for Ulta Beauty. We know beauty enthusiasts remain passionate and engaged with the category, and we have great talent, a strong culture, a differentiated operating model, and the right strategy to drive growth,” continued Dillon. “As we transition into the new normal, I am confident the Ulta Beauty team will continue to innovate, move with agility and efficiency, and grow as the largest and most admired beauty retailer in the U.S.”

GUIDANCE:

“We are encouraged by the recent improvement in sales trends, but we believe it will take time to fully return to pre-COVID levels. Given continued disruption from the pandemic, new operational protocols, and near-term employment and economic uncertainty, we expect sales will continue to be challenged for the rest of the year,” continued Dillon. “Longer-term, we are confident that Beauty will recover and thrive, given continued strong engagement and emotional connection with the category.”

The Company withdrew its guidance for fiscal 2020 on March 17, 2020 and is not providing an earnings outlook at this time. However, the Company is providing the following updated assumptions for fiscal 2020:

• The Company expects to incur between $35 million and $40 million in PPE and COVID-19 related costs in the second half of fiscal 2020;
• The Company expects to open approximately 30 new stores and execute approximately five relocation projects. Although plans for fiscal 2021 have not been finalized, the Company expects to open at least 30 new stores in fiscal 2021. The Company will continue to evaluate these plans based on demand and location economics, including committed costs incurred; and
• The Company anticipates capital expenditures will be between $180 million and $200 million, compared to the previous expectation of between $200 million and $210 million.

For earnings history and earnings-related data on Ulta Salon (ULTA) click here.