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Ulta Beauty (ULTA) Stock is Falling Despite Third-Quarter Earnings Beat

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Ulta Beauty Inc. (ULTA - Free Report) just released its third quarter fiscal 2017 earnings results, posting earnings of $1.70 per share and revenues of $1.34 billion. Currently, ULTA is a #3 (Hold) on the Zacks Rank, and is down 5.7% to $209 per share in trading shortly after its earnings report was released.

Ulta:

Beat earnings estimates. The beauty giant reported earnings of $1.70 per share, surpassing the Zacks Consensus Estimate of $1.67 per share. Net income increased 19.5% to $104.6 million.

Matched revenue estimates. The company saw revenues of $1.34 billion, coming in line with our consensus estimate of $1.34 billion and growing 18.6%. Ulta estimates that Hurricanes Harvey and Irma resulted in about $14 million in lost sales.

Comparable sales increased 10.3% compared to an increase of 16.7% in the prior year quarter, but this quarter’s growth was driven by 6.0% transaction growth and 4.3% growth in average ticket. 

E-commerce sales surged 62.0% to $119.8 million, representing 370 basis points of Ulta’s total comps.

Ulta expects net sales in the range of $1,926 million to $1,959 million for Q4, with comps, including e-commerce sales, increasing 8% to 10%. EPS is estimated to be in the range of $2.73 to $2.78. The company also reaffirmed its previously announced fiscal 2017 guidance.

“Our third quarter results clearly demonstrate the strength and distinct advantages of the Ulta Beauty business model,” said Mary Dillon, Chief Executive Officer. “We delivered double digit comparable sales growth, in spite of a moderation in the growth rate of our largest category - makeup - and meaningful disruption from hurricanes.”

Here’s a graph that looks at Ulta’s price, consensus, and EPS surprise:

Ulta Beauty Inc. Price, Consensus and EPS Surprise

Ulta Beauty Inc. Price, Consensus and EPS Surprise | Ulta Beauty Inc. Quote

Ulta Beauty, Inc. is a beauty retailer primarily in the United States and the premier beauty destination for cosmetics, fragrance, skin, hair care products and salon services. Ulta Beauty, Inc., formerly known as Ulta Salon, Cosmetics & Fragrance Inc., is based in Bolingbrook, Illinois.

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