Salon products and cosmetics retailer Ulta Beauty trounced fourth-quarter sales and earnings late Thursday. ULTA stock reversed higher in Friday morning trade.
The Bolingbrook, Ill.-based Ulta Beauty operates 1,355 stores across the U.S. Ulta's earnings and revenue have grown for the past seven consecutive quarters. Over the last four quarters leading up to Thursday's report, Ulta averaged 43% earnings growth and roughly 20% revenue growth.
On Wednesday, Deutsche Bank analyst Krisztina Katai noted that the beauty category's momentum carried into February, although at a slightly moderated pace. Industry and competitor data indicate a same-store sale upside for Ulta for Q4, with midteen comparable sales growth implied, Katai wrote.
Last month, competitor ELF Beauty blew away quarterly estimates as adjusted earnings doubled to 48 cents per share. ELF shares are up 32% since its report.
Earnings Results
Ulta adjusted earnings swept up 23.5% to $6.68 per share as revenue jumped 18.2% to $3.22 billion.
For the fourth quarter, Wall Street expected Ulta adjusted earnings to rise 4.6% to $5.66 per share on roughly 11% revenue growth to $3.03 billion.
Comparable sales climbed 15.6%, down from 21.4% growth during Q4 last year. The FactSet consensus guided for an 8.7% comparable sales increase.
Full-year sales surged 18.2% to $10.2 billion and net sales leapt 26% to $1.2 billion, both records for the company.
"As we move into fiscal 2023, we remain optimistic about the strength and resiliency of the beauty category, and I am excited about the opportunities ahead," CEO Dave Kimbell said in the release.
For fiscal 2023, Ulta forecasts diluted earnings to range from $24.70 to $25.40 per share on $10.95 billion to $11.05 billion in sales. The guidance is fairly higher than the FactSet consensus of $23.07 earnings per share on $10.15 billion in revenue. However, Ulta's comparable sales estimates of 4% to 5% growth are well below analyst predictions of a 13.5% increase.
ULTA Stock
ULTA stock reversed early losses and climbed 1.3% Friday. Shares are up more than 11% year-to-date.
ULTA stock has climbed nearly 26% after passing the 426.99 buy point for a cup-with-handle base in early November. Shares are extended beyond the buy zone for the current pattern, but have pulled back from their 537.52 peak from Feb 23. ULTA is currently hovering in the profit-taking zone
You can follow Harrison Miller for more stock news and updates on Twitter @IBD_Harrison
