Ulta Earnings Preview: If Q3 Holds, Upside Ahead
Elazar Advisors, LLC
Elazar Advisors, LLC
Ulta Salon: Possible 34% Upside
NYU Stern Investment Management Research • 11 Comments
NYU Stern Investment Management Research • 11 Comments
Tue, Sep. 20, 9:15 AM
- If there's been a sleeper in the retail sector over the last two years it's Ulta Salon (NASDAQ:ULTA).
- Sizzling same-store sales and a thriving on-trend e-commerce business has helped shares almost double in value.
- Did you know that by market cap Ulta Salon is now much larger than Macy's, Chipotle, Whole Foods Market, and Tiffany?
- A very good look at Ulta's success is highlighted in this interview of CEO Mary Dillon posted on Fortune.com. Dillon's strategy seems to back up the contention of SA contributors James Sands and Christoph Schrills that's it not too late for investors to jump on the Ulta bandwagon.
- The Ulta story may also be of interest to investors pondering the e.l.f. Beauty (Pending:ELF) IPO.
Sat, Sep. 17, 10:07 AM
- The IPO market gets a makeover next week with the public launch of e.l.f. Beauty (Pending:ELF). The company is selling 9.58M shares in an expected range of $14 to $16.
- The cosmetics brand is sold through e.l.f.'s website and is available at retailers such as Ulta Salon and Target, and CVS. The e.l.f. filing says the mass market cosmetics seller aims to take floor space from legacy brands (heads up AVP, EL, RDEN, REV). Wal-Mart (NYSE:WMT) is mentioned in the S-1, while Amazon is MIA.
- SEC S-1 dive: "We have major distribution whitespace, as we are currently in only approximately 19,000 national retail stores in the United States and believe there are thousands of additional stores available to us."
- The leading underwriters for the IPO are JPMorgan and Morgan Stanley, A lockup period of 180 days applies. TPG Growth holds a majority stake in e.l.f.
- What to watch: While consumer spending in the U.S. has been choppy, some analysts see demand in the lower-priced cosmetics category remaining strong. The spectacular run for Ulta Salon (NASDAQ:ULTA) over the last couple of years backs that trend and could be an indication of a long growth runway for e.l.f.
Thu, Sep. 15, 10:00 AM
- Ulta Salon (ULTA -2%) is under pressure in early trading.
- Earlier today, Goldman Sachs ran a block trade of 900K shares at $232.75. More details on the trade should be forthcoming.
- There was also an announcement today by Amazon of a delivery test in Chicago for beauty and personal care products from a local store. The service is part of Amazon Prime and offers delivery for as short as an one-hour window.
- Though Amazon's initiative is only a small blip at the moment, the threat of Amazon delivering beauty products at scale could enter the conversation on Ulta with the retailer previously lauded as being relatively Amazon resilient.
Tue, Aug. 30, 10:16 AM
- There's more confirmation that consumers are doing the heavy lifting in the U.S. to prop up GDP while business investment falls short.
- "Consumer confidence improved in August to its highest level in nearly a year, after a marginal decline in July," noted The Conference Board director Lynn Franco.
- Some analysts think the slowdown in auto sales is freeing up some spending in other areas, although certain sectors that rely on foot traffic (restaurants, department stores) aren't necessarily seeing the bounce.
- Companies that line up neatly with millennial trends seem to be the ones making the outrageous gains in the retail sector. Ulta Salon (NASDAQ:ULTA), Domino's Pizza (NYSE:DPZ), Burlington Stores (NYSE:BURL), and Amazon (NASDAQ:AMZN) come to mind -- with the four generating returns ranging from 40% to 60% over the last year.
- ETFs: XLY, XRT, VCR, RTH, RETL, FXD, FDIS, RCD, PEZ, PMR, PSCD, JHMC.
Fri, Aug. 26, 8:47 AM
- Cowen backs up its Outperform rating on Ulta Salon (NASDAQ:ULTA) after watching the retailer record another strong quarter of growth.
- Ulta Salon posted a sizzling 14.4% pace of comparable store sales growth after running up a 10% gain in the year-ago period.
- Once again, e-commerce exploded for Ulta Salon during the quarter, up 46% to $117M.
- Cowen analyst Oliver Chen boosts his price target on ULTA to $286 from $265.
- Shares of ULTA are down 2.38% premarket to $265 as investors digest the in-line guidance. It's nothing to worry about for investors long Ulta since 2014 that have watched their investment double in value.
Thu, Aug. 25, 6:23 PM
- Ulta Salon (NASDAQ:ULTA) -1.2% AH despite posting a solid Q2 earnings and revenue beat, as investors lock in some of the stock's 77% gain over the past 12 months.
- Ulta tallied its seventh straight quarter of double-digit sales growth, as Q2 revenues rose 22% Y/Y, in-line with analyst expectations, and comp-store sales gained 14.8% vs. guidance of 12.9% growth, although the rate cooled a bit from Q1's 15.2%.
- Ulta issues in-line guidance for Q3, seeing EPS of $1.25-$1.30 vs. $1.29 analyst consensus estimate, on revenues of $1.07B-$1.09B vs. $1.08B consensus.
- For the full year, Ulta now sees EPS growth in the low 20s percentage range, up from earlier guidance of 18%-20% growth, and expects sales to rise in the high teens percentage range on same-store sales growth of 10%-12%, up from an earlier outlook for 8%-10% growth, as e-commerce sales rise 40%.
Thu, Aug. 25, 4:05 PM
Wed, Aug. 24, 5:35 PM
Tue, Jun. 14, 8:49 AM
- Retail sales topped expectations in May with some categories tipping off a healthy spending trend.
- Nonstore retailers once again led all categories with 12% Y/Y growth. Amazon (NASDAQ:AMZN) had a lot to say with that strong performance.
- Health and personal care stores were also solid with an 8% Y/Y rise in sales. Chains such as Walgreens (NASDAQ:WBA), Rite Aid (NYSE:RAD), Ulta Salon (NASDAQ:ULTA), and Sally Beauty Holdings (NYSE:SBH) continue to draw millennial interest.
- Department stores lagged once again with a 0.9% M/M drop and 6% Y/Y tail-off. A tough month of weather contributed to a 2% M/M drop in the building materials and garden equipment (HD, LOW) category.
- Restaurants performed ahead of expectations, sales were up 0.8% M/M and 6.5% Y/Y. That mark bodes well for McDonald's (NYSE:MCD) continuing its streak of staying in positive territory with comparable-store sales.
- Previously: Retail sales decelerate from April's pace (June 14)
- Retail ETFs: XLY, XRT, VCR, RTH, RETL, FXD, FDIS, RCD, PMR, JHMC, CNDF.
Sat, May 28, 12:11 PM
- The retail sector staged a comeback over the last two weeks after a decent number of companies issued strong reports to dispel some of the concerns on sleepy consumer spending in the U.S. Retailers with a sharp focus on lower price points and an e-commerce business out of Amazon's (NASDAQ:AMZN) wheelhouse stood out.
- Ulta Salon (NASDAQ:ULTA): Sales growth sizzled for the company in Q1 and the future looks equally bright with the company's overall beauty market share only at 3%. "Ulta’s very compelling proposition of modern marketing, brand partnerships, and service offerings also strongly appeals to millennials," wrote Cowen's Olivia Chen. ULTA shares are up 26% YTD after Friday's post-earnings rally.
- Ollie's Bargain Outlet Holdings (NASDAQ:OLLI): The discounter delivered revenue growth of 21% and a comparable-store sales gain of 5% in Q1 to leverage off some fixed costs. Wall Street loves the stock (7 of 8 ratings at Buy), while several SA contributers have deep dives into the long-term "white space" opportunity with OLLI.
- Big Lots (NYSE:BIG): Shares sailed 14% on Friday after strong earnings and are now up 32% YTD. Younger homeowners are giving Big Lots more traffic than some expected as they skip department stores. SA contributor Christopher Davis likes the fundamentals in place and makes a strong case why Big Lots has more room to rally.
- Michaels Company (NASDAQ:MIK): Shares are up 27% over the last 90 days as more investors decouple their view on the stock from broad concerns over brick-and-mortar chains. The crafty Michaels has some protection from the Amazon threat and continues to gain popularity with thrifty shoppers.
- Overstock.com (NASDAQ:OSTK): Though there's been bouncy trading around Overstock, many analysts think it's in the right space at the right time with millennials on board with its model. Shares are at their highest level in more than six months. An investment in OSTK is also a bit of side bet on blockchain technology. SA contributor Fortress Capital explains.
- Add your own under-the-radar retail gems in the comment stream.
Fri, May 27, 9:12 AM
Fri, May 27, 8:07 AM
- Ulta Salon (NASDAQ:ULTA) crushed earnings after reporting a 15% increase in Q1 same-store sales which came off of a comparison to last year's 11% increase.
- Margins soared during the quarter off the extra sales leverage.
- Traffic was up 11% and the average ticket was 4% higher.
- E-commerce sales rose 39% to $61M.
- Guidance from Ulta Salon was equally bright. The company expects Q2 sales of $1.041B to $1.058B and EPS of $1.32 to $1.37. For the full year, Ulta sees comparable sales growth of 10% to 12%.
- Previously: Ulta Salon beats by $0.16, beats on revenue (May 26)
- ULTA +7.91% premarket to $230.60.
Thu, May 26, 5:39 PM
Thu, May 26, 4:11 PM
Wed, May 25, 5:35 PM
Thu, Apr. 7, 5:36 PM