Ulta Crushes Estimates, Boosts Guidance

By Paul Ausick Updated Jan 13, 7:30AM EST · Published May 26, 4:29PM EDT

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Ulta Crushes Estimates, Boosts Guidance — © Thinkstock

Ulta Salon, Cosmetics & Fragrance Inc. (NASDAQ: ULTA) reported first-quarter 2016 results after markets closed on Thursday. The beauty products maker and salon operator posted diluted earnings per share (EPS) of $1.45 on $1.07 billion in sales. In the same period a year ago, the company reported EPS of $1.04 on sales of $868.1 million. First-quarter results also compare to the Thomson Reuters consensus estimates for EPS of $1.29 and $1.03 billion in revenue.

Consolidated same-store sales rose 15.2% in the second quarter compared with the same period a year. Same-store sales rose 11.4% in the year-ago quarter. Ulta attributed the big increase this year to more traffic (11%) and a higher average ticket (4.2%).

For the second quarter of its fiscal year Ulta forecasts a same-store sales increase in the range of 11% to 13% and diluted EPS of $1.32 to $1.37. Last year the company posted EPS of $1.15 in the third quarter.

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For the full year, Ulta raised its adjusted diluted EPS estimate to a low-twenties range compared with a prior estimate for an increase of 18% to 20%. Same-store sales increases for the year have also been raised from a prior range of 8% to 10% to a new range of 10% to 12%. E-commerce sales are tagged to rise 40% year over year. Capital spending is set to rise from a prior estimate of $299 million to a new total of around $390 million which includes about $80 million to accelerate the company’s roll-out of new boutiques and to fund enhancements to hundreds of stores.

CEO Mary Dillon said:

Several positive factors are coming together to drive the momentum in our business, exemplified by the best comparable sales growth in our history as a public company. These include healthy consumer demand in the beauty category, our unique format and offering which are supporting sustained share gains, and effective collaboration across the enterprise to ensure strong execution of our growth strategies.

Ulta repurchased nearly 158 million shares of its common stock during the first quarter for a total of $843.5 million. The company ended the first quarter with $369.3 million in cash and short-term investments.

Shares traded up about 6% in after-hours trading Thursday, at $226.75 above a 52-week range of $120.38 to $214.44. The high was posted during Thursday’s regular session. Thomson Reuters had a consensus analyst price target of $212.31 before results were announced, with a high target of $240.00.

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About the Author Paul Ausick →

Paul Ausick has been writing for a673b.bigscoots-temp.com for more than a decade. He has written extensively on investing in the energy, defense, and technology sectors. In a previous life, he wrote technical documentation and managed a marketing communications group in Silicon Valley.

He has a bachelor's degree in English from the University of Chicago and now lives in Montana, where he fishes for trout in the summer and stays inside during the winter.