“Fragrance was our strongest category, delivering high, single-digit comp growth driven by men’s fragrance, gender-neutral fragrances, and new products, including new fall and holiday gift sets,” Dave Kimbell, CEO of Ulta Beauty, said during the retailer’s third-quarter 2024 earnings call on Thursday.
“Consumer interest in gender-neutral scents is increasing in our assortment, including [those from] Billie Eilish and Noyz,” he said. Meanwhile, “the growth of men’s fragrance was fueled primarily by newness from Armani and YSL and the appeal of established franchises from John Paul Gaultier and Valentino.”
This announcement from Ulta Beauty aligns with fragrance’s massive 2024 growth, including an uptick in interest in fragrance among teen boys. As reported by Glossy, teen boys’ spending on fragrance is up 26% year-over-year. TikTok mentions and Google searches for men’s scents are also up, the latter of which is tracking at around 1.4 million average monthly searches.
Also reported by Glossy last month, market research company Circana forecasts 18% of consumers will gift perfume or cologne this holiday shopping season.
Ulta CEO Kimball also called out several women’s fragrances that led sales growth in the quarter, including Kylie Jenner’s first scent, Cosmic, and Bella Hadid’s Orebella franchise, which includes four scents in oil-based formulations. He also mentioned Valentino, YSL and Nest as top contributors to fragrance’s overall growth for the retailer.
Ulta Beauty’s net sales during the thirteen-week period ending November 2, 2024 were $2.53 billion, up 1.7% year-over-year from $2.49 billion.
Looking at the first nine months of the year, compared to the same period in 2023, net sales increased 2%, from $7.7 billion to $7.8 billion. Gross profit was $3.1 billion compared to $3 billion.
As reported on the earnings call, another change to Ulta’s fragrance category has involved shrink — another hot topic in the beauty industry. Paula Oyibo, chief financial officer of Ulta Beauty, said the company’s investment in reducing fragrance theft has been fruitful. “Our investments in secure fragrance fixtures, combined with new inventory management processes and enhanced training for our field teams, are helping us control inventory shrink,” she said during the call.
Other bright spots mentioned on the call include an uptick in loyalty member sign-ups, which are up 5% year-over-year, bringing the total membership to 44.4 million. This customer base is an important business driver for Ulta Beauty, Kimbell said. “We grew our platinum and diamond [loyalty] member base [by] leveraging unique incentives like exclusive and early access to key events and brand launches, gifting, and personalized offers that drive engagement,” he said. “Platinum and diamond members shop more frequently and spend more each visit.”
Ulta Beauty’s loyalty program is free to join. Platinum status is a loyalty tier for members who spend at least $500 in a calendar year, while Diamond status is achieved by spending $1,200 in a calendar year.
The Ulta Beauty executive team also noted an increase in engagement on the Ulta Beauty shopping app. “[We experienced] double-digit growth in member engagement with the app, which accounted for about two-thirds of our e-commerce sales in Q3, up about 600 basis points from last year,” said Ulta CFO Oyibo.
Ulta Beauty is the largest brick-and-mortar beauty retailer in the U.S., with 1,437 retail stores across 50 states.
