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Headquartered in Bolingbrook, IL, Ulta Beauty Inc. (ULTA - Free Report) , is a leading beauty retailer in the U.S., offering a wide range of productsincluding cosmetics, fragrance, skincare, hair care, bath and body products, and salon styling tools. Ulta currently sells more than 25,000 products from about 500 well-established and emerging beauty and skincare brands across all categories and price points.
Impressive Q3 Earnings
Net sales spiked 28.6% to a record $2 billion, while operating profit increased to 14.2% of sales and diluted EPS grew to $3.94 per share. Sales were 19% higher compared to Q3 2019 as well.
Comparable store sales swelled by 25.8%, driven by strong transaction growth in stores. Total company transactions increased almost 17% and the average ticket jumped 7.7% in Q3; both of these metrics benefitted from a higher average selling price due to favorable category mix shifts and lower promotional levels.
Ulta also expanded its Ultimate Rewards loyalty program membership by 13% to a record 35.9 million members.
The beauty retailer opened seven new stores and launched its partnership with Target (TGT) with 92 in-store shops during the quarter.
Notably, Ulta experienced no major supply chain struggles in Q3, and inventory remained relatively low. As a result, gross profit landed at 39% of sales; management attributed the uptick in profitability to a higher sales footprint and shoppers buying higher-priced makeup, skincare and haircare products.
Can ULTA Surge Higher?
Year-to-date, shares of Ulta have climbed 41%. Estimates have been rising too, and ULTA is a Zacks Rank #1 (Strong Buy) right now.
For fiscal 2021, 14 analysts have revised their bottom-line estimate upwards over the last 60 days, and the Zacks Consensus Estimate has moved up over two dollars to $17.15 per share. Earnings are expected to climb about 268% compared to the prior year, and in 2022, Ulta’s bottom line is forecasted to post positive growth as well.
Looking ahead, Ulta upped its full-year outlook and now anticipates revenue to grow between $8.5 billion and $8.6 billion. Just six months ago, management was eyeing a top line range of $7.2 billion to $7.3 million for the year. Comp sales and profit growth are both expected to be significantly stronger than Ulta had initially planned as well.
This improving outlook, combined with a fast store expansion and the broader beauty industry rebound, could be just the thing to generate meaningful returns for Ulta shareholders in 2022 and beyond. If you’re an investor searching for a retail stock to add to your portfolio, make sure to keep ULTA on your shortlist.
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Bull of the Day: Ulta Beauty (ULTA)
Headquartered in Bolingbrook, IL, Ulta Beauty Inc. (ULTA - Free Report) , is a leading beauty retailer in the U.S., offering a wide range of productsincluding cosmetics, fragrance, skincare, hair care, bath and body products, and salon styling tools. Ulta currently sells more than 25,000 products from about 500 well-established and emerging beauty and skincare brands across all categories and price points.
Impressive Q3 Earnings
Net sales spiked 28.6% to a record $2 billion, while operating profit increased to 14.2% of sales and diluted EPS grew to $3.94 per share. Sales were 19% higher compared to Q3 2019 as well.
Comparable store sales swelled by 25.8%, driven by strong transaction growth in stores. Total company transactions increased almost 17% and the average ticket jumped 7.7% in Q3; both of these metrics benefitted from a higher average selling price due to favorable category mix shifts and lower promotional levels.
Ulta also expanded its Ultimate Rewards loyalty program membership by 13% to a record 35.9 million members.
The beauty retailer opened seven new stores and launched its partnership with Target (TGT) with 92 in-store shops during the quarter.
Notably, Ulta experienced no major supply chain struggles in Q3, and inventory remained relatively low. As a result, gross profit landed at 39% of sales; management attributed the uptick in profitability to a higher sales footprint and shoppers buying higher-priced makeup, skincare and haircare products.
Can ULTA Surge Higher?
Year-to-date, shares of Ulta have climbed 41%. Estimates have been rising too, and ULTA is a Zacks Rank #1 (Strong Buy) right now.
For fiscal 2021, 14 analysts have revised their bottom-line estimate upwards over the last 60 days, and the Zacks Consensus Estimate has moved up over two dollars to $17.15 per share. Earnings are expected to climb about 268% compared to the prior year, and in 2022, Ulta’s bottom line is forecasted to post positive growth as well.
Looking ahead, Ulta upped its full-year outlook and now anticipates revenue to grow between $8.5 billion and $8.6 billion. Just six months ago, management was eyeing a top line range of $7.2 billion to $7.3 million for the year. Comp sales and profit growth are both expected to be significantly stronger than Ulta had initially planned as well.
This improving outlook, combined with a fast store expansion and the broader beauty industry rebound, could be just the thing to generate meaningful returns for Ulta shareholders in 2022 and beyond. If you’re an investor searching for a retail stock to add to your portfolio, make sure to keep ULTA on your shortlist.