ULTA Beats Estimates, Boosts Guidance

Print Email

ULTA Salon, Cosmetics & Fragrance Inc. (NASDAQ: ULTA) reported third-quarter 2016 results after markets closed on Thursday. The beauty products maker and salon operator posted diluted earnings per share (EPS) of $1.40 on $1.13 billion in sales. In the same period a year ago, the company reported EPS of $1.11 on sales of $910.7 million. Third-quarter results compare to the consensus estimates for EPS of $1.37 and $1.11 billion in revenue.

Consolidated same-store sales rose 16.7% in the third quarter compared with an increase of 12.8% in the same period a year. ULTA attributed the big increase this year to more traffic (11.1%) and a higher average ticket (5.6%).

For the fourth quarter of its fiscal year ULTA forecasts a same-store sales increase in the range of 12% to 14% and diluted EPS of $2.08 to $2.13. Analysts are looking for EPS of $2.05 and revenues of $1.51 billion. Last year the company posted EPS of $1.69 in the fourth quarter on revenues of 1.27 billion.

For the full year, ULTA raised its full fiscal year guidance as well. The company now expects same-store sales growth of 13% to 15% and EPS growth in the “high twenties percentage range.” Analysts were forecasting EPS of $6.31, an increase of about 26% from last year’s total of $4.98.

CEO Mary Dillon said:

Ulta Beauty’s top line accelerated in the third quarter, driving record sales and earnings performance. Our associates continue to execute against our growth strategies, resulting in success across several areas: new brand acquisition, increased Ulta Beauty brand awareness, rapid growth in our loyalty program, improving supply chain performance, and robust e-commerce growth.

ULTA repurchased nearly 1.45 million shares of its common stock during the first nine months of the year for a total of $297 million. The company ended the quarter with $243.1 million in cash and short-term investments.

Shares traded up about 4% in after-hours trading Thursday, at $267.77 in a 52-week range of $146.77 to $278.63. The 12-month consensus price target was $295.72 before results were announced, with a high target of $350.00.