Ulta Salon Cosmetics & Fragrance, Inc. (ULTA) just hit a new 52-week high after reporting impressive Q4 results that included an 11% earnings surprise. With an average earnings surprise of 17% over the last four quarters and bullish growth projection, this Zacks #1 rank stock offers a momentum makeover.
Company Description
Ulta Salon operates as a beauty retailer selling various cosmetic and salon products and services in the United States. The company was founded in 1990 and has a market cap of $2.75 billion.
Although ULTA has been riding a very smooth trend line higher for the last 6 months, shares got an extra boost into a new 52-week on March 10 after the company reported strong Q4 results that came in ahead of expectations.
Fourth-Quarter Results
Revenue for the period was up 20% from last year to $474 million. Earnings also looked good, coming in at 49 cents, 11% ahead of the Zacks Consensus Estimate, where the company has an average earnings surprise of 17% over the last four quarters.
The good results were driven by strong same-store sales (stores opened at least 14 months), up 10.4% on the heels of a 6.2% increase last year.
Profitability was also on the upswing, with gross margin increasing 110 basis points from last year to 33.1%.
Financial Profile
Although ULTA doesn’t have a ton of cash on its balance sheet, with cash and equivalents of $8 million, it also has no long-term debt.
Estimates
The good quarter pushed estimates higher, with the current year up 7 cents to $1.51 and the next-year estimate gaining 6 cents to $1.85, a bullish 23% growth projection.
But in light of recent gains, the valuation picture does look a little hot, where ULTA has a PEG ratio (PE/Growth) of 1.3, modestly higher than the benchmark for value of 1.
12-Month Chart
On the chart, ULTA jumped to a new 52-week high on the good quarter. Look for support from the trend line on any weakness, take a look below.
Michael Vodicka is the Momentum Stock Strategist for Zacks.com. He is also the Editor in charge of the Zacks Momentum Trader Service.
ULTA SALON COSM (ULTA): Free Stock Analysis Report
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