Ulta Crushes Earnings With Strong Comps

By Chris Lange Updated Jan 13, 4:29PM EST · Published Dec 3, 4:27PM EST

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Ulta Crushes Earnings With Strong Comps — © ULTA Salon, Cosmetics & Fragrance Inc.

Ulta Salon, Cosmetics & Fragrance, Inc. (NASDAQ: ULTA) released its fiscal third quarter earnings report after the markets closed Thursday. The company had $1.11 in earnings per share (EPS) on $910.7 million in revenue compared to consensus estimates from Thomson Reuters that call for $1.05 in EPS on $880.00 million in revenue. The same period from the previous year had $0.91 in EPS on $745.72 million in revenue.

Comparable sales increased 12.8% compared to an increase of 9.5% last year. The 12.8% comparable sales increase was driven by 10.6% growth in transactions and 2.2% growth in average ticket.

During the quarter, Ulta repurchased 288,427 shares of its stock at a cost of roughly $47.5 million. At the end of October, $238.8 million remained available under the $400 million share repurchase program.

In terms of guidance, the company expects EPS in the range of $1.48 to $1.53 and net sales in the range of $1.21 billion to $1.23 billion for the coming quarter. There are consensus estimates that call for $1.50 in EPS on $1.22 billion in revenue for the fiscal fourth quarter. At the same time, comparable sales, including e-commerce, are expected to increase 8% to 10%.

Mary Dillon, CEO of Ulta, commented on earnings:

Ulta Beauty’s excellent performance in the third quarter was highlighted by top line momentum driven by double digit traffic growth, leading to above-plan earnings growth. Delivering against our six strategic imperatives continues to drive our business forward. We believe our efforts to build awareness of the Ulta Beauty brand are bringing more guests to discover our differentiated assortment and the benefits of our loyalty program, now boasting 17 million active members. As a result of our financial performance in the third quarter and our position of strength heading into the holiday season, we are raising our guidance and now expect our 2015 full year earnings growth rate to be in the low twenties.

On the books, Ulta ended the fiscal third quarter with $359.8 million in cash and short-term investments compared to $395.1 million in the same period from the previous year.

Shares of Ulta closed Thursday down 0.2% at $163.19, with a consensus analyst price target of $181.06 and a 52-week trading range of $120.38 to $176.77. Following the release of the earnings report, shares were up 4.8% at $171.01 in the after-hours trading session.

About the Author Chris Lange →

Chris Lange is a writer for 24/7 Wall St., based in Houston. He has covered financial markets over the past decade with an emphasis on healthcare, tech, and IPOs. During this time, he has published thousands of articles with insightful analysis across these complex fields. Currently, Lange's focus is on military and geopolitical topics.

Lange's work has been quoted or mentioned in Forbes, The New York Times, Business Insider, USA Today, MSN, Yahoo, The Verge, Vice, The Intelligencer, Quartz, Nasdaq, The Motley Fool, Fox Business, International Business Times, The Street, Seeking Alpha, Barron’s, Benzinga, and many other major publications.

A graduate of Southwestern University in Georgetown, Texas, Lange majored in business with a particular focus on investments. He has previous experience in the banking industry and startups.