It’s been a pretty busy June for Ulta Salon, Cosmetics & Fragrance, Inc. (ULTA) so far. Already this month, the beauty retailer has reported a strong fiscal first quarter, offered an encouraging fiscal second-quarter outlook, and convinced the majority of covering analysts to raise their expectations.
All in all, ULTA is a solid aggressive growth name and enjoys a longer-term “Outperform” recommendation.
Strong Fiscal Q1 Sales Growth
The most important thing for a retail company is sales; everything else springs from that. Ulta Salon, Cosmetics & Fragrance did what it had to do in that regard, announcing year-over-year sales growth of 19.1% to $320.2 million from $268.8 million. The company said the enhancement was balanced across all major categories, and attributed it to dynamic marketing, compelling brands and its preferred beauty shopping experience.
Just as important, though, was that same-store sales jumped 10.8%, compared to a decline of 2.3% last year.
Earnings per share came in at 23 cents, or nearly 3 times the year-ago performance of 8 cents. The result also beat the Zacks Consensus Estimate by nearly 28%. This marked the company’s sixth consecutive positive quarterly surprise; and when ULTA beats, it usually does so in the double digits.
In the last 4 quarters, it has put together an average surprise of more than 45% (thanks in large part to a 100% surprise in last year’s fiscal second quarter).
Nice Fiscal Q2 Outlook
In the end, though, a company’s really only as good as their guidance, and Ulta doesn’t expect its earnings growth to dry up in the fiscal second quarter.
The company now expects earnings per share between 16 cents and 18 cents for the period, which was above the Zacks Consensus Estimate last week at 15 cents. As a result, earnings estimates for the quarter are up 20% in 7 days.
Net sales are anticipated at $311 million to $317 million, compared to last year’s $273.5 million.
Earnings Estimates for Ulta
The solid guidance and strong quarterly report was enough for 10 upward revisions out of 11 total estimates for this fiscal year. The Zacks Consensus Estimate for the year ending January 2011 is now 99 cents per share, marking a gain of 7.6% in 7 days. If you go out 2 months, the guidance is up 16.5%.
As for next fiscal year, ending January 2012, the Zacks Consensus Estimate has increased 5.4% in a week to $1.18 per share, thanks to 8 upward revisions out of 11 total estimates. It has advanced 13.5% in 2 months.
Furthermore, analysts currently expect earnings growth of 19.2% for next fiscal year over this fiscal year.
