Ulta Salon Cosmetics & Fragrance Earnings: Double-Digit Growth Again

Ulta Salon Cosmetics & Fragrance Inc. (NASDAQ:ULTA) reported net income above Wall Street’s expectations for the third quarter. Ulta Salon, Cosmetics & Fragrances is a beauty retailer that provides one-stop shopping for salon products and salon services in the United States.

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Ulta Salon Cosmetics & Fragrance Inc. Earnings Cheat Sheet

Results: Net income for Ulta Salon Cosmetics & Fragrance Inc. rose to $38.2 million (59 cents per share) vs. $26.8 million (42 cents per share) in the same quarter a year earlier. This marks a rise of 42.5% from the year-earlier quarter.

Revenue: Rose 22.4% to $505.6 million from the year-earlier quarter.

Actual vs. Wall St. Expectations: Ulta Salon Cosmetics & Fragrance Inc. beat the mean analyst estimate of 56 cents per share. It beat the average revenue estimate of $473.9 million.

Quoting Management: Chuck Rubin, President and Chief Executive Officer, stated, “Ulta drove better than expected sales growth and operating margin improvement to deliver outstanding performance in the third quarter. We gained market share across all of our major product categories through our disciplined focus on the five components of our multi-year growth strategy: accelerating store growth, introducing new products, services and brands, enhancing our loyalty program, broadening our marketing reach, and increasing our digital focus including Ulta.com. Ulta’s third quarter underscores our team’s strength in execution: we opened 49 stores, increasing Ulta’s store base by 10% during a single quarter, and we completed most of the previously announced prestige brand boutiques. We ended the quarter with Lancme boutiques in 79 of our stores and Clinique boutiques in 42 stores. Looking ahead to next year, based on the high quality of available real estate and our team’s proven ability to execute, we expect to exceed our long-term plans for 15% to 20% annual store growth and currently plan to open approximately 125 stores in 2013, representing 22% square footage growth. We are confident that Ulta will continue to grow its position as a beauty and trend authority and drive strong sales and profit growth in the quarters and years to come.”

Key Stats:

The company has enjoyed double-digit year-over-year percentage revenue growth for the past five quarters. Over that span, the company has averaged growth of 22.4%, with the biggest boost coming in the fourth quarter of the last fiscal year when revenue rose 23% from the year earlier quarter.

The company has now seen its net income rise for three quarters in a row. In the second quarter, net income rose 46.4% and in the first quarter, the figure rose 49.7%.

The company has now surpassed analyst estimates for four quarters in a row. It beat the mark by 3 cents in the second quarter, by one cent in the first quarter, and by 5 cents in the fourth quarter of the last fiscal year.

Looking Forward: The average estimate for the fourth quarter remains unchanged at 96 cents a share. For the fiscal year, the average estimate has moved up from $2.55 a share to $2.61 over the last ninety days.

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(Company fundamentals provided by Xignite Financials. Earnings estimates provided by Zacks)

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