Ulta Beauty, Inc. (ULTA), an American chain of beauty stores, has reported upbeat fourth-quarter results on the back of strong consumer demand as COVID-19 restrictions continued to relax. Following the news, shares of the company rose 1.2% in the extended trading session on Thursday.
The company operates 1,308 retail stores across 50 states and distributes its products through its website.
Results in Detail
ULTA’s net sales rose 24.1% year-over-year to $2.7 billion and surpassed analysts’ estimates of $2.69 billion. Similarly, year-over-year comparable sales also increased 21.4% on the back of a 10.4% rise in transactions and a 9.9% increase in average ticket.
Earnings stood at $5.41 per share, up 78.5% from the same quarter last year and significantly better than analysts’ expectations of $4.57 per share.
During the quarter, ULTA opened six new stores. It had opened two stores in the year-ago quarter. The company ended the year with 1,308 stores, sprawling across 13.8 million square feet.
For the Fiscal Year 2021, net sales came in at $8.6 billion, up 40.3% from the previous year. Also, ULTA reported EPS of $17.98, up from $3.11 in the Fiscal Year 2020.
The CEO of Ulta Beauty, Dave Kimbell, said, “Our outlook for fiscal 2022 reflects our expectations for Beauty growth as well as the challenge of lapping exceptional performance in fiscal 2021, ongoing wage and supply chain cost pressures, and investments in new capabilities to support future growth.”
“We are emerging from the pandemic as a stronger, healthier business, we operate in an attractive and growing category, and we have an exceptional team in place to execute our ambitious plans and deliver for our guests, associates and shareholders,” Kimbell added.
Capital Deployment Activities
Alongside earnings, ULTA announced that its Board of Directors has approved a new share repurchase authorization of up to $2 billion. The new program replaces the prior authorization, implemented in March 2020, and comes with no expiration date.
Guidance
For the Fiscal Year 2022, ULTA forecasts net sales to be in the range of $9.05 billion to $9.15 billion, lower than the consensus estimate of $9.2 billion. Comparable sales are expected to grow in the range of 3-4%.
Additionally, earnings are projected to be between $18.20 per share and $18.70 per share, higher than the consensus estimate of $17.83 per share. ULTA plans to open 50 more stores in 2022.
Wall Streets’ Take
The Wall Street community is cautiously optimistic about the ULTA stock and has a Moderate Buy consensus rating based on 8 Buys and 3 Holds. The Ulta Beauty stock price prediction of $456.80 implies 20.4% upside potential to current levels. Shares have gained 9.2% over the past year.
Blogger Opinion
TipRanks data shows that financial blogger opinions are 100% Bullish on ULTA, compared to a sector average of 69%.
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