Ulta Beauty Inc. 4Q Earnings Beat, But 2017 Forecast Mixed

Ulta Beauty Inc. (NASDAQ:ULTA) late Thursday [Mar 9, 2017 | 4:00pm] posted market-beating fourth quarter results, but its mixed 2018 outlook sent investors rushing for the exits in aftermarket trading.

Written by StockNews.com

The Bolingbrook, IL-based cosmetics retailer reported Q4 earnings per share (EPS) of $2.24, which was $0.11 better than the Wall Street consensus estimate of $2.13.

Revenues surged 24.6% from last year to $1.58 billion, also topping analysts’ view for $1.54 billion.

Ulta also noted that comparable store sales (“comps”) jumped 16.6% in the latest period, well above the 12% to 14% range the company anticipated. Strong comps growth was driven by 10.9% more transactions and 5.7% growth in average ticket size.

The company’s guidance wasn’t nearly as good as its earnings results, however. Ulta forecast Q1 EPS of $1.75-1.80, in-line with analysts view for $1.78, but its revenue outlook of $1.244-1.265 billion was below Wall Street expectations for $1.27 billion. It also expects comps to rise 9-11%, in-line with estimates.

For the full year 2017, Ulta expects comps to rise 8% to 10%, which could miss Wall Street’s +10% estimate.

The company commented via press release:

“The Ulta Beauty team delivered outstanding fourth quarter results, capping an exceptional year of sales and earnings growth while investing to drive market share gains and create sustainable long term shareholder value,” said Mary Dillon, Chief Executive Officer. “We are confident in our outlook for continued success in 2017 as we execute our strategy to be a destination for All Things Beauty, All in One Place™. Our new brand pipeline is very healthy and we are particularly excited to announce the addition of the Estée Lauder Companies’ MAC brand, which will launch on Ulta.com and begin to roll out to stores this spring.”

Investors clearly weren’t pleased with the company’s mixed outlook, as Ulta Beauty shares fell $11.98 (-4.38%) to $261.79 in after-hours trading Thursday. Year-to-date, ULTA had gained 7.39% prior to today’s report, versus a 5.96% rise in the benchmark S&P 500 index during the same period.