March 8, 2017
After the closing bell this Thursday, one of my top retailers will release its fourth-quarter results. All of the signs are pointing to another blowout quarter for this company, and I don't want you to miss out. Continue reading for complete details on what's sure to be a market moving earnings report.
The stock I'm referring to is ULTA Salon Inc. (ULTA). For those of you who aren't as familiar with ULTA Salon, this is a one-stop beauty shop, with over 20,000 unique cosmetic products from over 500 brands. In addition, ULTA operates in-store salons, which offer hair, skin and brow services. ULTA currently operates over 970 stores across 48 states, and it boasts over 18 million loyalty program members.
In December, ULTA caused a stir with its third-quarter report. Compared with Q3 2015, net sales jumped 24.2% to $1.13 billion, above the $1.11 billion consensus estimate. Sales at stores open a year or longer improved 14.3% on higher customer traffic and increased spending per customer.
Meanwhile, net income jumped 23.2% year-on-year to $87.5 million, or $1.40 per share. Analysts were calling for $1.37 EPS, so ULTA posted a 2.9% earnings surprise. ULTA also bought back $297 million of its stock; the company currently has $425 million remaining under its ongoing share repurchase program.
ULTA also has high hopes for Thursday's report. Looking ahead to the fourth quarter, the company expects to bring in between $1.52 billion and $1.54 billion, and between 12% and 14% comparable sales growth. Earnings per share is expected to range between $2.08 and $2.13.
Meanwhile, analysts are looking for ULTA to post 21.6% annual sales growth and 26% earnings growth. However, ULTA has topped analysts' expectations for the past several quarters running, and I expect a repeat performance here.
So it's easy to see why ULTA passes with flying colors in my Portfolio Grader stock screening tool. ULTA is a B-rated Buy, and I recommend that you buy it before its March 9 earnings announcement.