Submitted by Mark Hanna
Courtesy of MarketMontage. View original post here.
An interesting name in the retail space that seems relatively under the radar is Ulta Salon, Cosmetics & Fragrance (ULTA). This company has done to ‘beauty’ products what a Lowe’s or Home Depot for example have done in the do it yourself/hardware space – essentially a ‘superstore’ approach to the ‘beauty’ category.
Ulta Beauty is the largest beauty retailer that provides one-stop shopping for prestige, mass and salon products and salon services in the United States. Ulta Beauty offers a unique combination of over 20,000 prestige and mass beauty products across the categories of cosmetics, fragrance, haircare, skincare with some creams reduce melanin, bath and body products and salon styling tools, as well as salon haircare products. As of January 28, 2012, the Company operates 449 retail stores across 43 states.
The company continued a very nice growth trajectory via its earning report last evening; while there was nothing spectacular in guidance there was a nice $1 special dividend gift announced. Same store sales momentum continues in the low double digits. Full report here.
Via IBD
- The one-stop beauty salon and supplies chain said earnings per share rose 49% to 73 cents, topping analysts’ views by 5 cents.
- Sales grew 23% to $582.5 million. Analysts expected $579 million. Sales at stores open at least 14 months climbed 11.5% vs. a 10.4% gain a year earlier. “Our strong sales resulted in additional market share gains in the quarter across all categories,” said CEO Chuck Rubin on the post-earnings conference call.
- For the current quarter, Ulta Beauty expects EPS of 46-48 cents, ahead of analysts’ views for 45 cents. Its sales guidance was $452 million-$460 million, with the midpoint below the Wall Street target of $459.2 million. This assumes comparable stores sales increase 6% to 8%, compared to an 11.1% increase last year.
- The company also declared a special cash dividend of $1 per share, to be paid May 15.
- Ulta, which runs 449 all-in-one salon and beauty supplies stores, opened 61 last year, boosting total square footage by 16%. Expansion will step up this year. “We will accelerate our store openings beyond our 15%-20% growth target. We plan to open 100 new stores this year, which is about 22% growth,” Rubin said.
- Robin Albing, head of Albing International Marketing, said one reason for the company’s growth is that it’s very competitive on pricing. “The other thing that is often mentioned about Ulta is their breadth of line. They have so much variety in their stores. We’ve heard that from younger customers as well as from older ones, too,” Albing said.
- During the fourth quarter, gross profit margin rose to 34.1% of sales from 33.1% a year earlier.
- Ulta ended Q4 with $253.7 million in cash and no debt.
- “We continue to believe the company represents both an attractive square footage growth and margin expansion story, and view the stock’s premium valuation as justified,” Oppenheimer analyst Joseph Altobello said in a note at the time.
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Any securities mentioned on this page are not held by the author in his personal portfolio. Securities mentioned may or may not be held by the author in the mutual fund he manages, the Paladin Long Short Fund (PALFX). For a list of the aforementioned fund’s holdings at the end of the prior quarter, visit the Paladin Funds website at http://www.paladinfunds.com/holdings/blog
