Ulta Beauty Inc (NASDAQ:ULTA) Q2 2020 Earnings Conference Call - Final Transcript
Aug 27, 2020 • 05:00 pm ET
Thank you. [Operator Instructions] Our first question comes from Adrienne Yih with Barclays. Please state your question.
Good afternoon. Thank you for taking my question and nice to see the progress. Mary, I wanted to get back to the comment you made on newness is sort of coming through nontraditional brand but I want to go back to given that prestige brands are contending with contracting mall-based distribution channel are you seeing either broader SKU assortment from existing prestige brands? And is there an opportunity to expand beyond fragrance into some brands like Chanel or Dior? And then my follow-up for Scott just a clarification on the negative low-double-digit to negative mid-teen; if you're running negative mid-single-digit now to beginning of the third quarter should we expect third quarter to be stronger than the fourth quarter with all the uncertainties or maybe the two of them similar in nature from a year-on-year standpoint? Thank you very much?
So Adrienne, thank you for your questions and maybe I'll start with the second one first because yeah, so I think right directionally we'd say we're expecting Q3 to be somewhat better than Q4. There is a lot of uncertainty as everybody knows but we have got resets and launches coming in Q3. I think holiday, it's just something we're all a little more cautious about given new ways that people are going to think about shopping and hours available, etc, so we're thinking directionally that way.
Yeah and as far as the consequences is concerned, I would just point maybe to looking at the promotional calendar, I know a lot of you guys track this stuff very closely so you can schedule out what types of things we did last year over the course of the third and fourth quarters. And with the background color being we're trying to pull back on some of those things, right, we talked about in our comments. So overall directionally I would say the fourth quarter probably slightly weaker on balance just because of the volume of sales there and some of the promotional activity that historically have taken place in the fourth quarter overall.
And Dave would you take the first part of the question, thank you?
Yeah, absolutely, as it relates to your question on assortment and evolution of that, for sure, we're continuing to see disruption in the prestige marketplace and that's something that we've seen for a while and a dynamic that we feel like we have been taken advantage of and continuing grow share across all categories in the prestige side of the business. And that comes from all different types of brands certainly, exclusive and new brands like Kiehl some of our established independent brands and brands like Tarte, and Urban Decay and Too Faced where we've launched exclusive innovation across those brands. And on the more prestige luxury side we have made specific advancements on that. You asked specifically about Chanel and yes, we have a strong fragrance business but