Categories AlphaGraphs, Earnings, Retail

Robust comparable sales drive Ulta Beauty’s Q4 profit higher; stock gains

Ulta Beauty (ULTA) reported an increase in fourth-quarter sales and earnings which also topped market expectations, aided by solid comparable sales growth and stronger store traffic. The company’s stock gained sharply during the extended trading session Thursday following the earnings report.

Ulta Beauty Q4 earnings up 3%
Ulta Beauty Q4 2018 earnings infographic

Net income increased to $214.7 million or $3.61 per share from $208.2 million or $3.40 per share in the fourth quarter of 2017. Earnings also came in above analysts’ forecast.

Net sales of the beauty retailer jumped 9.7% annually to $2.12 billion during the three-month period, which was slightly above the Wall Street estimates. Total comparable store sales rose 9.4%, while e-commerce sales climbed 25.1% year-over-year. Retail comparable sales were up 7%, which included a 6.2% salon comparable sales growth.

During the quarter, total comparable store sales rose 9.4%, while e-commerce sales climbed 25.1% year-over-year

“Solid execution by our merchandising, store operations, e-commerce, marketing, supply chain, and systems teams drove healthy sales growth and a differentiated guest experience throughout the important holiday season,” said CEO Mary Dillon.

With the digital expansion progressing, the company is currently looking for a 20-30% increase in e-commerce sales for fiscal 2019, when comparable store sales are seen growing in the 6-7% range. Net income is estimated to rise to the range of $12.65 per share to $12.85 per share on a projected sales growth in the low double digits. It also expects to incur capital expenditures of $380-$400 million. The management plans to open around 80 new stores and remodel/re-locate 20 others this year.

Also see: Q4 revenues beat Street view 

Ulta Beauty repurchased around 2.5 million shares in fiscal 2018 for about $616. Earlier this week, the company approved a new share repurchase authorization of $875 million, to replace the existing program. During the fourth quarter, the company opened 12 new stores and closed one, taking the total store count to 1,174.

After dropping to a six-month low in December last year, Ulta Beauty shares bounced back and maintained a steady uptrend. The stock, which currently trades near its recent peak, rose sharply in the extended trading hours Thursday after closing the regular session lower.


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